ML12339A712

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Official Exhibit - ENTR00489-00-BD01 - State of New York Public Service Commission, Order Authorizing Efficiency Programs, Revising Incentive Mechanism and Establishing a Surcharge Schedule. (Cases 07-M-054 and 07-G-0141)
ML12339A712
Person / Time
Site: Indian Point  Entergy icon.png
Issue date: 10/25/2011
From:
State of NY, Public Service Commission
To:
Atomic Safety and Licensing Board Panel
SECY RAS
References
RAS 22229, 50-247-LR, 50-286-LR, ASLBP 07-858-03-LR-BD01
Download: ML12339A712 (101)
v • d • e


Text

STATEOFNEWYORKPUBLICSERVICECOMMISSIONCASE07-M-0548-ProceedingonMotionoftheCommissionRegardinganEnergyEfficiencyPortfolioStandard.CASE07-G-0141-ProceedingonMotionoftheCommissionastotheRates,Charges,RulesandRegulationsofNationalFuelGasDistributionCorporationforGas Service.ORDERAUTHORIZINGEFFICIENCYPROGRAMS,REVISINGINCENTIVEMECHANISM,ANDESTABLISHINGASURCHARGESCHEDULE(IssuedandEffectiveOctober25,2011)

ENTR00489 Revised: April 6, 2012 United States Nuclear Regulatory Commission Official Hearing Exhibit In the Matter of

Entergy Nuclear Operations, Inc. (Indian Point Nuclear Generating Units 2 and 3)

ASLBP #:07-858-03-LR-BD01 Docket #:05000247 l 05000286 Exhibit #:

Identified:

Admitted: Withdrawn:

Rejected: Stricken: Other: ENTR00489-00-BD01 10/15/2012 10/15/2012 TABLEOFCONTENTSINTRODUCTION...............................................................................................................1PROCEDURALHISTORY................................................................................................2 OVERVIEWOFTHESTAFFWHITEPAPER.................................................................3 ISSUES................................................................................................................................4Reauthorizationofprogramsfor2012-2015...................................................................4Generalconsiderations....................................................................................................4Continuousimprovement................................................................................................8Outliersandconsolidation.............................................................................................13Lowincomeprograms...................................................................................................15NationalFuelGasprograms..........................................................................................16Lighting.........................................................................................................................20Sectorbalance................................................................................................................21Surcharges.....................................................................................................................

22Yeartoyearbudgetingandaccrualaccounting............................................................25Utilityshareholderincentives........................................................................................27Hospitalprogramproposal............................................................................................32Interruptiblegascustomers...........................................................................................32OtherissuesdiscussedintheWhitePaper....................................................................32SEQRAFINDINGS..........................................................................................................33CONCLUSION.................................................................................................................33 APPENDICESAppendix1.Programs,targetsandbudgets Appendix2.SBCcollectionscheduleAppendix3.2011efficiencysavingsforecastAppendix4.Utilityincentiveproposal Appendix5.Summaryofcomments STATEOFNEWYORKPUBLICSERVICECOMMISSIONAtasessionofthePublicServiceCommissionheldintheCityofAlbanyonOctober13,2011COMMISSIONERSPRESENT:GarryA.Brown,ChairmanPatriciaL.Acampora MaureenF.Harris RobertE.Curry,Jr.JamesL.LaroccaCASE07-M-0548-ProceedingonMotionoftheCommissionRegardinganEnergyEfficiencyPortfolioStandard.CASE07-G-0141-ProceedingonMotionoftheCommissionastotheRates,Charges,RulesandRegulationsofNationalFuelGasDistributionCorporationforGasService.ORDERAUTHORIZINGEFFICIENCYPROGRAMS,REVISINGINCENTIVEMECHANISM,ANDESTABLISHINGASURCHARGESCHEDULE(IssuedandEffectiveOctober25,2011)BYTHECOMMISSION:INTRODUCTIONAuthorizationforalargemajorityoftheenergyefficiencyprogramsundertheEnergyEfficiencyPortfolioStandard(EEPS)isscheduledtoexpireDecember31,2011.Inthisorder,wereauthorizemostofthoseprogramsforthefour-yearperiodendingDecember31,2015,withrevisedtargetsandbudgetswhereappropriate.ThreegasefficiencyprogramsrunbyNationalFuelGaspursuanttoitsratecaseswillbeconsolidatedintotheEEPSprogram.Thepercentageoffundingallocatedtolow-incomeprogramsisincreased.Rulesforbudgetingfromyeartoyearareclarified.

CASES07-M-0548and07-G-0141-2-Takenintheaggregate,theEEPSelectricprogramsareonatrajectorytoachievetheCommissionsgoalofreducingelectricityuseby11.2millionMWhbytheendof2015.Staffisdirectedtoworkwithprogramadministratorstofurtherrefineprogramtargetsandbudgets,andtoimproveprogramadministration.Inadditiontoreauthorizingprograms,wewillbeginaprocessofrevisingtheutilityshareholderincentivemechanism.Incentiveshavesucceededintheirprimarypurposeofmakingenergyefficiencyapriorityforutilities;however,Staffhasidentifiedvariouswaysinwhichourcurrentincentivemechanismhasimpairedtheeffectiveadministrationofprograms.Inthisorderweoutline,forfurtherpubliccomment,arevisedmechanismthatwouldrewardincentivesintwostages,firstforindividualutilityperformance,andsecondforachievementofthestatewidegoal.Finally,thescheduleforcollectionofsurchargeswillbeadjustedtoreducecashbalances.Thiswillmitigatecollectionlevelsovertheperiod2012-2014.PROCEDURALHISTORYOnJune23,2008theCommissionissueditsOrderEstablishingEnergyEfficiencyPortfolioStandardandApprovingPrograms(the2008EEPSOrder).

1TheOrderadoptedefficiencytargetsandestablishedaprocessforapprovalofenergyefficiencyprogramstobeadministeredbythestateselectricutilitiesandNYSERDA,andauthorizedthecollectionofSystemBenefitsChargesurcharges.OnMay19,2009,theCommissionissueditsOrderEstablishingTargetsandStandardsforNaturalGasEfficiencyPrograms(the2009EEPSGasOrder).2TheOrderadoptedanoverallgasefficiencytargetandestablishedaprocessforapprovingthegasefficiencyprogramstobeadministeredbythestatesgasutilitiesand NYSERDA.SubsequentordersapprovedefficiencyprogramsandauthorizedthecollectionofcorrespondingSBCsurchargesfromcustomers.

3 1Case07-M-0548,EnergyEfficiencyPortfolioStandard(EEPS),OrderEstablishingEnergyEfficiencyPortfolioStandardandApprovingPrograms(issuedJune23,2008).

2Case07-M-0548,EnergyEfficiencyPortfolioStandard(EEPS),OrderEstablishingTargetsandStandardsforNaturalGasEfficiencyPrograms(issuedJune23,2008).

3AsofAugust22,2011,68NoticesofProposedRulemakinghadbeenissuedintheimplementationoftheEEPSprogram,and37Ordershadbeenissued.

CASES07-M-0548and07-G-0141-3-OnDecember30,2010,theCommissionissueditsOrderContinuingSystemBenefitsChargeFundedPrograms(the2010SBCIIIExtensionOrder).

4TheefficiencyprogramsaregenerallyauthorizedthroughDecember31,2011.TheOrderadoptedasix-monthextensionofSBCIIIandauthorizedthetransitionofSBCIIIenergyefficiencyresourceacquisitionprogramstotheEEPSprogram.TheOrderalsoprovidedthatcollectionswouldbespreadoutbeyond2011tobettermatchcollectionswithexpenditures.

5The2008EEPSOrderstatedthatareviewofEEPSinitiativeswouldbecarriedoutin2011toinformtheCommissionsdecisionastoreauthorizationofprograms.OnJuly6,2011StaffissuedaWhitePaperwhichreportedonthestatusofEEPSprogramsanddiscussednumerousissuesrelatedtoreauthorizationoftheprograms.Theoverallefficiencytargetsidentifiedinthe2008EEPSOrder,the2009EEPSGasOrder,andthe2010SBCIIIExtensionOrderwerealsoadoptedthroughtheendof2011.

6PubliccommentswerereceivedonorbeforeAugust22,2011,andreplieswerefiledSeptember9,2011.

7OnJuly6and7,2011,fourpublicstatementhearingswereconductedintheserviceterritoryofNationalFuelGas,relatedtothatcompanysConservationIncentive Program.Over75membersofthepublicspokeatthosehearings.InadditiontoformalcommentsfiledwiththeSecretary,numerouspubliccommentsweresubmittedviaemail.OVERVIEWOFTHESTAFFWHITEPAPERManyoftheissuesaddressedinthisorderwerediscussedatlengthintheWhitePaper.Inthisorderwewillreference,butnotrepeat,theWhitePaperdiscussions,focusing insteadonpubliccommentsandourownevaluationoftheissues.TheWhitePaperstatedthatEEPSprogramsaremakingsatisfactoryprogress,despiteastartthatwasslowerthanprojected.AchievementofefficiencysavingsfromEEPSprogramsthroughFebruary28,2011,wassubstantiallylowerthantheaggregategoalestablished 4Case10-M-0457,etal.,SystemBenefitsCharge(SBC)Programs,OrderContinuingSystemBenefitsChargeFundedPrograms(issuedDecember30,2010).

5Asmallnumberofprogramsthatrequirelongleadtimeshavetargetsandbudgetsthat extendbeyond2011,andsomecollectionshavebeenspreadoutbeyond2011tobetter matchthetimingofcollectionswiththetimingofexpenditures.

6ANoticeofProposedRulemakingwaspublishedintheStateRegisteronJuly6,2011.

7AsummaryofcommentsisincludedasAppendix5.

CASES07-M-0548and07-G-0141-4-bytheCommissionandthetargetsestablishedintheapprovalofindividualprograms.Thegoalsandtargetswereaggressiveandambitious,andshortfallsresultedfromthetimeneededforapprovalandroll-outoftheprograms.Also,theseriousdeclineintheeconomy,coincidingwiththeroll-outofmanyprograms,isbelievedtohavehadadampeningeffectoncustomerparticipation.Considering2011forecastsinisolationfromthepreviousyears,however,revealsanencouragingtrend.ProjectionsincludedintheWhitePapershowedEEPSprogramsintheaggregateapproaching100%achievementoftargetsinthe2011calendaryear.Updatesandcorrectionstothoseforecastsnowshowexpectedelectricsavingsat87.6%oftargets,andgassavingsat67.8%oftargets.

8StaffidentifiedanddiscussedawiderangeofissuesrelatedtopotentialimprovementsintheEEPSprogram.Ratherthanreiteratetheissueshere,werefertotheWhitePaperforafulldiscussion.Staffidentifiedalimitedrangeofrecommendationsforactioninthisorder,asfollows:Actualgassavingsarelikelytobemuchhigherthan67.8%fortworeasons:nearlyhalfofNYSERDAsgastargetreflectsanindustrialprogramwithmulti-yearleadtimes,whichisnotexpectedtoproducesavingsuntil2012-2013;andancillarygassavingsfromelectricprograms,projectedbyStafftobeintherangeof20-30%oftotalgassavings,are notincludedinthe67.8%figure.Reauthorizesurchargesandthemajorityofprograms;Reallocatefundspursuanttoananalysisofoutlierprogramsandconsolidateselected programs;Clarifyrulesrelatedtoyear-to-yearbudgetingandunspentfundsfrompreviousyears,to increaseflexibilityforprogramadministrators;andEliminatethecurrentshareholderincentivemechanism.

ISSUESReauthorizationofprogramsfor2012-2015Generalconsiderations 8ForecastsdetailedbyprogramadministratorareincludedinAppendix3.

CASES07-M-0548and07-G-0141-5-StaffhasrecommendedreauthorizationofmostoftheexistingEEPSprograms,subjecttocontinuousimprovement.Alargemajorityofcommentingpartiessupportthisapproach.Beforeadoptingthisrecommendation,however,wemustconsiderwhethercontinuationoftheEEPSprogramingeneralremainsawiseuseofratepayerfunds.Weconcludethatitis.Participationinenergyefficiencyprogramsbycustomersofallsizesenablesthemtocontroltheirenergyconsumptionandrealizesavingsontheirbills.

9InvestmentinenergyefficiencyalsoensurescontinuedinvestmentinadiverseportfolioofresourcestomeettheneedsofNewYorkState.Inparticular,thelargeandgrowingdependenceonnaturalgasforelectricgenerationandheatingexposesthestatetoriskofdramaticincreasesinthepriceofgas,whichhistoryhasshownarepossible,ifnotprobable.Investmentinenergyefficiencyactsasahedgeagainstsuddenincreasesingasprices.Theenergyeconomyisvulnerabletoupheavalfromawiderangeofpossibleevents,manyofwhichwehavewitnessedwithinrecentyears,includingdramaticeconomicchanges,earthquakes,and storms.Allofthesecanaffecttherelativeavailabilityandattractivenessofvarioussourcesof powerusedforlifeandbusinessinNewYork.Measuresthatreduceourdependenceonconventionalpowergenerationremainanimportantsourceofeconomicsecurity.Moreover,wearecommittedtoreducingtheimpactofclimatechangeandotherenvironmentalhazards,throughreductionofcarbonandotheremissions.Anyfutureattempttoachieveverylargereductionsincarbonemissions,suchasthe80%reductionthatmanyscientistsdeemnecessary,willlikelycomeataveryhighcost.Energyefficiency,evenifitcostsslightlymorethantoday'scarbonemittingsupplysources,representsalowcoststrategyforachievingcarbonreductions.WerecognizethatelectricitygenerationandgasconsumptionaresignificantcontributorstocarbonemissionsintheState.Astheregulatorofthosewhodeliverthatelectricityandgas,wehavearesponsibilitytoaffectelectricityandgasconsumptiontopreserveenvironmentalvaluesandtheconservationofnaturalresources.Thebenefitsoftheportfoliodiversityhedgeandemissionreductionsarenoteasilyquantified.Nonetheless,theyconvinceusthatcontinuationofNewYork'saggressiveenergyefficiencyinitiativeisimperative,solongasthecostsofenergyefficiencyoptionsfallin 9Thefullrangeofbenefitsofenergyefficiencyisdiscussedinthe2008EEPSOrderaswellastheOrderInstitutingProceeding(issuedMay16,2007)andtheSEQRAfindings, referencedbelow.

CASES07-M-0548and07-G-0141-6-arangethatiscomparabletothecostofsupplyoptions,whichtheycurrentlydo.Wehaveusedcosteffectivenesstestsinthepasttoevaluateefficiencymeasures,andwewillcontinuetodosointhefuture,butwerecognizethattheydonotprovideapreciseandcomprehensiveanalysisofthecostsandbenefitsofanefficiencymeasure.TheStaffWhitePapersolicitedcommentsfrompartiesaboutwaysthatourcosteffectivenesstestmightberevisedtoaccommodatetheseandotherconcerns.Numerouscommentsweresubmitted,somearguingforthetesttobemoreexpansive,otherarguingformakingthetestmorestringent.Changesinenergypricesmighthaveaneffectonthecalculationofcost-effectiveness;ontheotherhand,amajorityofcommentersarguethatourcost-effectivenesstestistoonarrowandshouldaccountforawiderrangeofbenefits.WearenotconsideringarevisiontoourTotalResourceCost(TRC)testatthistime.Wewill,however,considertakingupthisissueatafuturedate.Withnarrowexceptions,theexistingEEPSmeasureswereevaluatedagainsttheTRCatthetimeoftheirapproval,andthereisnoneedtore-evaluatethematthistime.TheStaffWhitePaperrecommendedagainstsuchare-evaluation,notingtheimportanceofcontinuityof programs.WeagreethatitisimportantforEEPSprogramstohavesufficientstabilitytobecomeestablishedandtotakeadvantageofimprovementsthatcancomefromexperience.

Energyefficiencyprogramsrequiretimetogainpublicrecognition,confidence,andparticipation.AsUIU 10Takingtheseconsiderationsintoaccount,wewillactheretokeepmostofthecurrentprogramsmovingahead.Wewillcontinueourprogramofevaluation,measurementand verification,andweretaintherighttoorderprogramchanges,aswarranted,inthefuture.correctlyobserves,EEPSwasinitiatedtoservearangeofpurposes,includingeconomicdevelopment.Programsareimplementedbycontractorsmakingbusinesscommitments,anditisnotreasonabletoexpectefficiencyprogramstosucceediftheyaresubjecttobeingdiscontinuedonshortnoticewheneverthereisashiftinenergyprices.WearealsomindfulofthemarkettransformationeffectsofanefficiencyprogramthatcanproducewidespreadsavingsbeyondthespecificbenefitsofEEPS-fundedprojects.WealsoacceptStaffsrecommendationtocontinueusingthe2015goalof7.7millionMWhasaplanningtoolforourelectricefficiencyprograms.Takingintoaccountthe 10UtilityInterventionUnit(UIU),DivisionofConsumerProtection,NewYorkDepartmentofState.

CASES07-M-0548and07-G-0141-7-incorporationofSBCIIIefficiencyprogramsintoEEPS,thejurisdictionalgoalisincreasedto11.2millionMWh.

11Althoughamajorityofcommentssupportthegoal,severalexpressconcern.MultipleIntervenors(MI)statesthatthecostofEEPSprogramsistoohigh,andthe2015goalshouldbescaledbackandprogramsreducedaccordingly.MIarguesthattherecessionshouldforcearethinkingofthegoal;reductionsinwholesaleenergypriceshaveincreasedthepaybackperiodformanytypesofprojects;nonewelectricgenerationisneededfortheforeseeable future;andthegulfbetweenNewYorkpricesandthenationalaveragepersists.TheNewYorkIndependentSystemOperator(NYISO)suggeststhat,foritsplanningpurposes,aslightlyscaledbackgoal,extendedto2018,wouldbemoreeffectivethanthecurrent2015goal.TheNYISOpresentedananalysisclaimingthatthe2015goalcouldnotbeattainedinacost-effectivemanner.TheJointUtilitiesalsoquestionwhetherthe2015goalisattainable,especiallygiventhelikelyeffectsofchangesinlightingstandards.Theysuggestthatthegoalshouldberevisitedafterthecompletionofefficiencypotentialstudies.TheCommissionsjurisdictionalportionofastatewide15by15goalwasdiscussedandadoptedinthe2008EEPSorder.Changesincircumstancessincethattimedonotrequireustorevisitthegoalatthistime.Thecurrentportfolioofprograms,ifextendedwithoutrevisionthrough2015andachievedata100%levelfrom2008through2015,wouldhaveresultedinexceedingour2015goalbyasubstantialmargin.

12Despitethesluggisheconomy,EEPSprogramsaremakingsatisfactoryprogresstowardourgoal,andarecost-effectivetakenasawhole.Theaggregatetargetsapprovedinthisorder,consideredinconjunctionwithsavingsalreadyachievedandotherfactors 13 11Byjurisdictionalgoalwerefertotheportionofthestatewide15%by2015goalthatcanbeachievedbyentitieswithintheCommissionsjurisdiction,includingutilitycontractswith NYSERDA.Otherportionsofthestatewidegoalwillbeachievedbyenergycodes,appliancestandards,andotherentitiessuchasLIPAandNYPA.,wouldachievethe2015goalwithamarginofapproximately21%.

12TheoriginalmarginbuiltintothesavingstargetsisreducedbythedownwardadjustmentstotargetsdrivenbychangesintheTechnicalManual.

13NYSERDAanticipatesmodestefficiencysavingsresultingfromSBCIVprograms,which wedeemtocontributetowardthejurisdictionalgoal.

CASES07-M-0548and07-G-0141-8-TheanalysisoftheNYISOwasbasedonperformancefrom2009through2011.NYSERDAdisagreeswiththeNYISOsanalyticapproach,arguingthatitfailstotakeencumberedfundsintoaccount,andcomparesdissimilarprogramsacrossvaryingsectors.Takingintoaccountthesignificantimprovementinperformanceforecastfor2011andbeyond,therevisionsintargetsandeliminationofnegativeoutliers,andthefactthatthetargetsinplacethrough2011wouldhave(ifextendedthrough2015andachievedata100%rate)resultedinexceedingthe2015goal,weagreewithStaffthatourjurisdictionalgoalfor2015remainsreasonable.ContinuousimprovementAtpresentthereare103programsapprovedunderEEPSorders,andthreeprogramsoperatingunderNationalFuelGasrateorders.TheWhitePaperrecommendedastrategyofcontinuousimprovementoftheportfolioofprogramsthatarenowinplace,ratherthananewcompetitiveprocessthatmightresultinawholesalerestructuringoftheEEPSportfolio.Staffsrecommendationentailsreauthorizationofprogramsandaccompanyingsurcharges,withrevisionofprogramtargetstotheextentpractical,aswellasminorchangesto theEEPSportfoliobasedanoutlieranalysis,andconsolidationofseveralprograms.CommentersoverwhelminglysupportedStaffssuggestedapproachtoreauthorizationatthistime.Theneedforcontinuityofoperationswasstressedbymany.TherearefiveprincipalreasonssupportingStaffsrecommendation.First,manyprogramshaveonlyrecentlybecomefullyoperational,anditwouldbeprematuretocompare theirresultswithmorematureprograms,orwithotheralternatives.Itisimpossibletoperformacomprehensivereviewuntilmoreexperienceisgained.Second,althoughoverallprogramperformanceduringtheyears2009-2010didnotmeetouraggressivetargets,performancein2011appearstobesatisfactoryandthetrendisencouraging.Third,giventhelimiteduniverseofeffectiveefficiencymeasures,itisunlikelythatacompetitivesolicitationwouldresultinasubstantiallydifferentportfolio.Fourth,itisefficienttomaintaincontinuityofprogramoperation,forcontractors,customers,andadministrators,totheextentpossible.

14 14Asonecommenterobserved,thehealthofhundredsofsmalljob-creatingbusinessesacrossthestateisatstakeintheorderlycontinuationofprograms.Finally,consideringthetimeandeffortinvolvedinthepreviousroundofprogramapprovals,anew CASES07-M-0548and07-G-0141-9-generalsolicitationwouldbeadiversionofresources-bothofStaffandprogramadministrators-thatarefarmoreproductivelyfocusedonimprovementofexistingprograms.WeagreewithStaffsrecommendationonthegeneralapproachtoreauthorizingprograms.Acompletelistofauthorizedprograms,withtargetsandbudgets,isincludedinAppendix1.ThetargetsenumeratedinAppendix1reflectrevisionstotheTechnicalManual.TheTechnicalManual-basedrevisionswillalsobethesubjectofafutureorderrevisingtargetsfortheperiodendingDecember31,2011,forpurposesofcalculatingincentives.ItispossiblethatoneormoreofthetargetsenumeratedinAppendix1couldberevisedinoursubsequentorder;ifso,wewillprovideforanautomaticrevisionofthecorrespondingtargetsinAppendix1.One-yeartransfersoffundsthathaveoccurredpriorto2012arenotreflectedintheauthorizedfigures;ifprogramadministratorsseekcontinuationofthosetransferstheycanusetheexistingtransfer/approvalprocess,orpetitiontheCommissionforapermanentchangeinprograms.TheCommissionsjurisdictionalgoalforEEPS,adoptedinthe2008EEPSOrder,was7.7millionMWh.AddingthetargetsfortheSBCIIIefficiencyprogramsthatwereaddedtoEEPSproducesajurisdictionalgoalof11.2millionMWh.Thetargetsauthorizedinthis order,combinedwithestimatedachievementsthrough2011,willproduce13.5millionMWhofsavingsin2015.Inotherwords,ifalltargetsareachievedat100%,thejurisdictionalgoalwillbeexceededbyapproximately21%.Thereauthorizationincludesfundingforevaluation.Methodsformeasurementandverificationofenergysavings,andunbiasedapproachestoreliablyassessprogramdesignandperformance,arecriticalforseveralreasons.Thesereasonsinclude:determiningprogramefficacy;respondingtostatewideplanningandforecastingneeds;estimatinglostrevenuerecoveryandincentivepayments;updatingtheTechnicalManual;andpinpointingareasforprogramimprovement.Werequirethatevaluationfundingbemaintainedat5percentofaprogramadministratorstotalprogrambudget,spreadpro-rataacrossindividualprogram budgets.Werecognizethatthecomplexity,scope,costandtimingofevaluationeffortscanvaryamongprograms.Also,evaluationsarenotconductedonanannualbasis.Asaresult,theactual annualevaluationneedsforindividualprogramsmaybemoreorlessthan5percentofthe programs'budgets.Therefore,wewillallowprogramadministratorstoallocatetheoverallgasandelectricevaluationbudgetsasneededamongitsgasandelectricportfoliosofprograms,solongasthetotalbudgetforallprogramsismaintainedat5percent.Allevaluationbudgetsmust CASES07-M-0548and07-G-0141-10-bereviewedandapprovedaspartofStaffsreviewofaprogramsevaluationplan.Inreviewingactualresultsinthefuture,wewillexpectStafftoviewevaluationexpensesonaportfolio-widebasis.WealsorecognizethattheadministrationcostscurrentlyincludedinNYSERDA'sapprovedbudgetsarebasedonNYSERDA'sportfolioaveragerate,whichiscurrentlysetat8%.Aswithevaluationcosts,differenttypesofprogramsrequiredifferentlevelsofadministrativeattentionandthereforetheactualcoststoadministerNYSERDA'svarious programswillvaryabove,andbelow,theportfolioaverage.Therefore,wewillallowNYSERDAtoallocateitsoveralladministrativecostbudgetasneededamongitsgasandelectricportfoliosofprograms,solongastheaggregateadministrationcostbudgetismaintainedattheCommissionapprovedrate.Insomecases,evaluationofsimilarprogramsandmeasureswillprovemorecosteffective,andpotentiallymorerigorous,ifconductedjointlybytwoormoreprogramadministrators.Tofacilitatethisapproach,upto33%oftotalevaluationbudgetsmaybeused forjointevaluationandresearchstudiesapprovedbytheDirectoroftheOfficeofEnergyEfficiencyandEnvironment.Within120daysofthisorder,Staff,workingwiththeEvaluation AdvisoryGroup,isdirectedtoprepareaplanidentifyingprogramsandresearchareasforwhichjointevaluationwillbeperformed,thecostsofevaluation,andtheprogramadministrator(s)thatwillmanagetheevaluation.WithapprovaloftheDirectorofOEEE,evaluationfundsmaybereallocatedtotheprogramadministrator(s)selectedtomanagethejointevaluationandresearchstudies.Inaddition,forthefouryearsfrom2012through2015,wedirectNYSERDAtocontinuetofundindependentconsultingevaluationservices,tobedirectedbyStaff,toensure thatStaffandtheEvaluationAdvisoryGrouphaveadequateresourcestoexecutetheirresponsibilities.Fundingshallbe$500,000annually,fromNYSERDAsevaluationbudgetorfrominterestearnedonSBCfunds, 15 15ThisisacontinuationofthefundingarrangementestablishedinCase07-M-0548,OrderModifyingSourceofFundsforIndependentEvaluationConsultant,issuedJune24,2009.NYSERDAshallalsocontinuetofundStatewide CASES07-M-0548and07-G-0141-11-EvaluationProtocolDevelopment 16Somecommentersexpressedconcernthatwhilereauthorizationofprogramsisreasonable,theprocessforsubsequentimprovementneedstobeclarified.InJune,2011,weatarateof$750,000annuallyoverthesamefour-yearperiod,alsofromNYSERDAsevaluationbudgetorfrominterestearnedonSBCfunds.adoptedasetofpoliciesdesignedtoincreaseflexibilityintheadministrationofprograms.

17Wherecontinuousimprovementistakenverybroadly-i.e.therangeofpolicyissuesraisedbytheWhitePaperandcommenters,aswellastherefinementofprograms-nosingleprocessencompassesthatrange.StaffrecommendedinitsWhitePaperthatthestartingpointforanyindividualprogramtargetshouldbethe2011targetafteritisrestatedorreducedtoreflectnecessaryadjustmentsduetoimplementationoftheTechnicalManualandtheresultofanyreductionorrestatementinresponsetovariousprogram-specificpetitionspendingbeforetheCommission.Also,individualprogramtargetsgoingforwardshouldreflectreasonablyachievableannual levelsoftargetsandbudgetsinformedbythemostrecentannualrateofspendingand performanceandnewprojectionsofpost-start-upperformancerates.Severalprogramadministratorsstatedintheirreplycommentsthataprocessshouldbedevelopedintheupcomingmonthstorefineprogramtargetsandbudgets.NYSERDAproposesthatprogramadministratorsbeallowedtoproposetargetsandbudgetsbyprogrambasedontheirknowledgeandunderstandingofEEPSrulesandcurrentmarketconditions.ConEdison,O&R,NYSEGandRG&Eexpresssimilarpositions.ConEdison/O&RfurthersuggestthatStaffmeetwiththecompaniesprogramadministratorsassoonaspossibletoreviewthecompaniessavingstargetsandbudgetplansforthecontinuationofexistingprogramsandproposednewprogramsinthe2012-2015timeframe.NYSEGandRG&Ebelievethatthe2012targetsshouldbedevelopedbasedonananalysisoftheimpactoftheeconomicdownturnandotherlessonslearned,affectingprogramadministratorsabilitytoimplementprogramsandachievesavingstargetlevelsdevelopedfor2011.

16AsdefinedinCase07-M-0548,OrderApprovingNewSBCIIIMajorFundingCategoryEntitledStatewideEvaluationProtocolDevelopment,issuedMarch13,2009.

17Case07-M-0548,OrderAdoptingModificationstotheEnergyEfficiencyPortfolioStandard (EEPS)ProgramtoStreamlineandIncreaseFlexibilityinAdministration(issuedJune20, 2011).

CASES07-M-0548and07-G-0141-12-Becausemanyprogramshaveonlybeguntooperatefullyduring2011,ithasnotbeenfeasibletore-evaluatetargetsinmanycases.Wewillsettargetsatthistimebasedon2011targets,restatedtoreflectnecessaryadjustmentsduetoimplementationoftheTechnicalManualaswellasvariousprogram-specificpetitionspreviouslyresolvedbytheCommission.Whereaprogramadministratorhasaseriousconcernrelatedtothereasonablenessofaprogramtarget,thisconcernshouldbeaddressedtoensuretargetsandbudgetsarereasonablyset.Wewillnot,however,instituteacomplexreviewprocessencompassingeveryprogram,whichwouldbelikelytooccupyaninordinateamountoftimefromStaffandprogramadministratorsandresultinmostcasesinminimaladjustments.Ifprogramadministratorsidentifyissueswiththeircurrentprogramswhichtheybelievewillresultinsubstantivechangestotargetsand/orbudgets,theyshouldcontactStaffwithspecificproposals,tobegindiscussionsregardingthoseprograms.Wedirectprogramadministratorstosubmitassoonasispractical,andnotlaterthanMarch31,2012,anyprogrammodificationsthatwouldresultinsubstantialimpactsontargetsandbudgets.

Programadministratorsshouldprioritizesothatalimitedrangeofsubmittalsneedtobe consideredbytheCommission.

18ConsideringthewiderangeofissuesidentifiedbyStaffandbyparties,wearemindfulthatthestrategyofcontinuousimprovementcreatestheriskofoverloadingtheImplementationAdvisoryGroup.SeveraloftheissuesraisedintheWhitePaperorbypartiesarerecommendedforfurtherworkbytheIAG.TheJointUtilitiesobservethatmoremoneyneedstobeallocatedtoadministrativefunctionsiftheIAGistoperformalloftheworkbeingreferredtoit.Wedonot,atthistime,seethenecessityofincreasingadministrativebudgets.ThevariousprojectsundertakenbytheIAGneednotbeperformedsimultaneously;Staffandprogramadministratorsshouldprioritizeandmakeoptimaluseoftheirexistingresources.Thiswillresultinmoreexpeditedreviews.The2008EEPSOrderauthorizedcollectionof$6millionannuallythrough2011forastatewidecustomeroutreachandeducation/marketinginitiativetosupportEEPS.WeconcludedthatthisinitiativewouldbeanintegralpartofasuccessfulEEPSstrategybyestablishingaconsistentprogramidentityamongallprogramadministratorsandfacilitatingcustomerparticipation.InOctober2010,weapprovedanImplementationPlanforthisstatewide 18Theprocessweestablishherewillnotbethelastopportunitytoreviseprograms.

CASES07-M-0548and07-G-0141-13-initiativethroughNovember3,2012,andauthorizeditsdevelopment.

19OutliersandconsolidationTheapprovedImplementationPlanincludedsomesupplementalfundingfromtheDepartmentofPublicServiceGeneralAwarenessprogramalsoadministeredbyNYSERDA.Thestatewideoutreachandeducationinitiativehasnotyetgoneintoeffect.ThisorderprovidesnoincrementalcollectionsfromratepayersrelatedtotheImplementationPlan,andnoincrementalcollectionsinCalendarYear2012forstatewideoutreach.TheNovember3,2012expirationofauthorityfortheImplementationPlanremainsineffect.Whileweareapprovingbudgetauthorizationsforacontinuedoutreachandeducation/marketinginitiativetosupportEEPS,noadditionalspendingbeyondwhatwehavealreadyapprovedwilloccurbeforewehaveanopportunitytoreviewitsprogress.StaffwillprovideareporttotheCommissionsummarizingthestatusofthestatewideoutreachandeducation/marketingprogramandprogrammetrics,aswellasrecommendations,ifany,concerningchangesinprogramcontent,budgetsandcollections.StaffrecommendedthatfundingforoneNYSERDAprogram-theMultifamilyGeothermalHeatPumpprogram-shouldbediscontinuedandthatNYSERDAshouldanalyzewhetheritsBenchmarkingandOperationsEfficiencyProgramshouldbesubsumedwithintheFlexTechprogram.NYSERDAconcurswiththeanalysisoftheHeatPumpprogramandrecommendsthatthefundingfromthisprogramshouldbereallocatedintotheMultifamilyPerformanceProgram.Thisisareasonablerequestandwillbeadopted.NYSERDAdoesnotcommentdirectlyontheWhitePapersanalysisoftheBenchmarkingProgram.Weapproachthisissueasoneofconsolidation.NYSERDAshouldfileaproposalwithinsixtydaysdemonstratingaplanfortheBenchmarkingProgram,includingananalysisofwhetheritshouldbeconsolidatedintotheFlexTechprogram.TheWhitePaperrecommendedthattheNationalGridEnhancedHomeSealingfundsshouldbereallocated.NationalGridstatesthatthisprogramcanbemadeeffectiveifredesigned.Wewillcontinuefundingforthisprogramonacontingentbasisforoneyear,subjecttoreviewandpotentialreallocation.Asaconditionforcontinuingtheprogramduringtheyears2013-2015,NationalGridmustfileapetitionbyJuly1,2012.

19Case07-M-0548,EnergyEfficiencyPortfolioStandard(EEPS),StatewideEnergyEfficiencyOutreachandEducationCampaign,ImplementationPlan(approvedOctober14,2010).

CASES07-M-0548and07-G-0141-14-InapetitiondatedAugust15,2011,NYSEGandRG&ErequestedthatfundingfortheirHomeEnergyReportingprogramshouldbeterminated.Thatprogramcurrentlyhasanauthorizedbudgetthroughtheendof2012.Theprogramsbudgetthrough2012isreflectedinAppendix1,butreauthorizationthrough2015isnotincluded.ThatissuewillbedeterminedinthecontextoftheNYSEG/RG&Epetition.TheWhitePaperrecommendedthatNationalGridsResidentialEnergyStarProductsprogramshouldbecancelled,becausechangesintheTechnicalManualleftitwithonlyonecost-effectivemeasure.NationalGridagreeswithStaffsanalysisbutstatesthatitwillusetheflexibilityrecentlyprovidedbytheCommissiontoaddadditionalcost-effectivemeasurestotheprogram.Thisisareasonableproposal,andfundingforthisprogramwillbecontinuedforoneyear,subjecttoreviewandpotentialreallocation.Asaconditionforcontinuingtheprogramduringtheyears2013-2015,NationalGridmustfileapetitionbyJuly1,2012.StaffproposedthatNiagaraMohawksCommercialHighEfficiencyHeatingandWaterHeatingProgramshouldbeconsolidatedintoitscommercialandindustrialprograms.StafffurtherrecommendedthateachNationalGridcompanyshouldcombineitssmallcommercialandindustrialprogramwithitslargeindustrialprograminordertoeliminatethe currentbarriertoparticipationforcommercialcustomersusingmorethan12,000Dt.Nopartyobjectedtotheserecommendations,andtheywillbeadopted.StaffalsoproposedthatthesuccessofNYSEG/RGEsBlockBiddingprogramsshouldbeduplicatedbyotherprogramadministrators.

20Otherprogramadministratorsgenerallyexpressedreservationsaboutbeingorderedtoimplementprogramsthatmightnotwork effectivelyintheirterritoriesorwiththeirportfolios.TheBlockBiddingapproachoffersgreatpotentialforhighlycost-effectivesavingsinutility-administeredprograms.Werequireeachelectricutility,within90daysofthisorder,toeitherproposeacomparableprogramwitharecommendedsourceoffundingorexplainwhysuchanapproachwouldnotbeeffective.Autilitymayrecommendsupplantingthetargetsandbudgetsofexistingprograms,ormayrecommendalternativefundingsources.

20Blockbiddingprogramsallowenergyservicecompanies,performancecontractors,managementcompanies,andcustomerstosubmitproposalsforprojects.

CASES07-M-0548and07-G-0141-15-LowincomeprogramsTheWhitePaperreportedthatEEPSfundinglevelsforprogramsdedicatedtolowincomecustomersconstituteapproximately19%ofresidentialprogrambudgets,whilelowincomecustomersrepresentapproximately30%oftotalresidentialcustomers.Thisdisparity reflects,inpart,adeterminationthatfederalstimulusfundingundertheAmericanRecoveryandReinvestmentAct(ARRA)wouldoccupytheavailableworkforcewhileARRAfundswereavailable.Westatedinthe2009EEPSGasOrderthatourtargetsfollowing2011mightneedto reflectahigherpercentageoflow-incomefunding,followingthedeclineoffederalfunds.

21StaffprovidedadetailedanalysisintheWhitePaperandsoughtcommentsontheappropriateallocationofEEPSfundstolowincomeprograms.Manycommentersstatethata minimumof30%shouldbeallocated.TheNationalFuelAccountabilityCoalition(NFAC),a coalitionoffifteenwesternNewYorkorganizations,arguesthattheallocationshouldbe50%,

becausewhole-housedeepsavingsprogramsprovidelocalbenefitsintermsofjobsandindirectbenefitssuchasimprovedhousingstock.Othercommenters,includingmostutilities,donotopposeanincreaseintheallocationtolowincomecustomers,butstressthatachievementoftheCommissionsenergyefficiencygoalsmustbethehighestpriority.Wehavenot,generally,requiredstrictproportionalityinallocatingfundsamongcustomerclasses.However,energycostsposeaproportionallyhigherburdenonlowincomecustomersthanothercustomers.Itisconsistentwithourpolicygoalsandwiththestronglevelofpubliccommentonthisissuetoprovideincreasedenergyefficiencyservicestomeettheneedsoflow-incomehouseholds.Energyefficiencymeasuresthatweatherizehomes,suchasareprovidedinourcurrentlyauthorizedgaslow-incomeenergyefficiencyprograms,areofparticularvaluetolowincomehouseholdssincetheyhelppermanentlyreduceheatingcosts.Further,withtheexpirationofone-timeARRAweatherizationfunding,qualifiedinstallationcontractorsareavailabletomeetthedemandfromincome-qualifiedcustomers.Consideringthesefactors,wewillincreasefundingforlow-incomeprogramssothattheyrepresentapproximately30%ofthecollectionsattributabletoresidentialcustomers.Theneedanddemandforlow-incomeprogramsisgreatestintheareaofweatherization.

Therefore,inordertomakethemosteffectiveuseofthefundsallocatedtolowincome 212009EEPSGasOrder,pg.12.

CASES07-M-0548and07-G-0141-16-programs,NYSERDAsgas-fundedEmPowerprogramwillbeallocatedanincreaseof$18.6million.22Wearecommittedtomaintaininglowincomeprogrambudgetsatequitablelevels.Total2012electricbudgets,pursuanttothefiguresenumeratedinAppendix1,arereducedfrom2011collectionsby$7.7million.Gascollectionswillbeincreasedbyacommensurateamount,tofundaportionoftheincreaseintheEmPowerbudget.Asofthemidpointofthisyear,NYSERDAreportssubstantialunencumberedbalancesinitsgaslow-incomeprograms.

23Althoughend-of-year2011balancesarenotknownatthistime,itislikelytheywillbesufficienttofundtheremainderofthebudgetincreaseauthorizedhere,atleastthroughthe2012calendaryear,dependingonhowquicklyexpendituresunderthisprogramareaccelerated.

24NationalFuelGasprogramsWewillmonitorthecashflowoftheEmPowerprogram;whenexpendituresbegintomatchbudgetedlevels,wewillconsideroptionstomaintainfullfundingoftheprogram.NYSERDAshouldprovidenotlessthansixmonthsnoticeofanydateonwhichitestimatesthat totalexpendituresfortheEmPowerprogramwillhaveequaledorexceededtotalcollectionsplus balancescarriedforward.NationalFuelGas(NFG)currentlyadministersthreeefficiencyprograms-knowncollectivelyastheConservationIncentiveProgram(CIP)--pursuanttoordersissuedinaratecase.25 22Untiltheissuesthathaveaffectedprogressinthemultifamilyprograms,suchastheeligibilityofinterruptiblecustomers,havebeenresolved,wewillfocusadditionallow incomefundingontheEmPowerprogram.TheauthorizationfortheseprogramsexpiresNovember30,2011.StaffproposedthattheprogramsbebroughtintotheEEPSprogram,sothattheycouldbetreatedonthesamefootingastheotherefficiencyprogramsrunbyutilitiesandNYSERDA.

23Thesebalancesresult,inpart,fromtheavailabilityofARRA-fundedprogramsoperatingduringthesametimeperiod.

24NYSERDAsgas-fundedEmPower,LowIncomeMultifamily,andLowIncomeSingle familyprogramswillbeanexceptiontoourdirective,asdiscussedinthesectiononSurcharges,thatuncommittedbalancesfrompriortoJanuary1,2012arenotauthorizedtobespent.25Case07-G-0141,ProceedingonMotionoftheCommissionastheRates,Charges,Rulesand RegulationsofNationalFuelGasDistributionCorporationforGasService,OrderAdoptingConservationIncentiveProgram(issuedSeptember20,2007).

CASES07-M-0548and07-G-0141-17-NocommentersopposedtheintegrationoftheNFGprogramsintoEEPS.Instead,commentswerefocusedonthesubstanceoftheprograms.RegardingthetransitionintoEEPS,NFGnotesthereisaone-monthgapbetweenitscurrentauthorization,expiringNovember30,2011,andtheproposedJanuary1,2012datefornewauthorizationofEEPSprograms.NFGproposesthatitbeallowedtocontinueitsCIPprogramsintheirpresentformthroughtheendof2011.Thisisareasonableproposalandisadopted.TheNationalFuelAccountabilityCoalitionsubmittedcommentsrelatedtoboththeCIPtransitionandthebroaderEEPSprogram.

26NFGstatesthattheCIPhasbeensuccessfulandshouldbecontinuedinitspresentform,andthat,althoughadministrativelythiscanoccurwithintheEEPSprogram,thedistinct featuresoftheCIPshouldberetained.30%ofCIPfundingisdedicatedtoitslowincomeprogram,35%toaresidentialrebateprogram,and15%toasmallbusinessprogramwiththeremainderdevotedtooutreachandevaluation.NFACmakesfourpoints:thelowincomeallocationshouldbeincreased(to50%);awhole-house,deepsavingsapproachshouldbe preferredoverrebateprograms;programadministrationshouldbeshiftedentirelytoNYSERDA;andanumbrellaonestopshoppingoutreachprogramshouldbeadopted.NFACpresentsananalysisconcludingthatthecurrentsurchargestructureisregressive,thatrebateprogramsarenotaccessibletolowincomecommunities,andthatrebateprogramsarelesscost-effectivethanwhole-houseprograms.NFGrequeststhatitbeallowedtomaintainthecurrentcontractualrelationshipthatithaswithNYSERDAfortwoCIPprogramsadministeredbyNYSERDAonbehalfofthecompany-theLowIncomeUsageReductionProgram(LIURP)andthenon-residentialrebateprogram.TheCIPnon-residentialrebateprogramisadministeredbyNYSERDAundertheExistingFacilitiesprogram,andtheCIPLIURPprogramisadministeredbyNYSERDAundertheEmPowerprogram.NFGhasauniquecontractualarrangementthatrequiresNYSERDAtospendtheCIPfundsthatitreceivesforthesetwoprogramslocally,withinthecompanysserviceterritory.

27 26NFACcommentswerereinforcedbynumerouspubliccommentsfromindividualsandorganizationssubmittedthroughemail,aswellasbriefercommentsfiledwiththeSecretary byseveralparties.NFGisconcernedthatiftheCIPprogramsaremergedintoEEPSwithoutretaining 27Inaddition,unspentoruncommittedCIPfundsforthesetwoprogramsarereturnedtoNFG.

CASES07-M-0548and07-G-0141-18-thecurrentcontractualarrangementwithNYSERDA,thefundscollectedfromtheNFGratepayersfortheLIURPandnon-residentialrebateprogramscouldbespentonprogramsprovidedbyNYSERDAinotherutilitiesserviceterritories.WeagreethatEEPSfundsforindividualutilityprogramsshouldbespentintherespectiveserviceterritories.TherequirementthatNFGCIPprogramfundsadministeredbyNYSERDAshouldbespentonlyinthecompanysserviceterritorywillberetainedanditisadoptedwithregardtotheCIPLIURPandnon-residentialrebateprogramsonly.NFGsoutreachandeducationbudgetiscurrently15%oftotalCIPspending.NFGstatesthatitisimportanttocontinueoutreachandeducationandnotesthatpreliminarydataregardingcustomerattitudesaboutconservationinthecurrentenvironmentofcontinuinglowgascostshasdiminishedcustomerspriorsenseofurgencyaboutreducingenergyusageandbills.However,thecompanybelievesthatfundingforoutreachandeducationcanbereducedby25%andstilladequatelyaddressconcernsaboutcustomerawareness.NFGproposesthatthe

$375,000reductioninoutreachandeducationspendingcaneitherberefundedtocustomersorre-allocatedtotheresidentialconservationprogramsinthecompanysserviceterritory.BasedonStaffsreviewofNFGsproposedoutreachandeducationinitiative,weconcludethatthecompanycanachieveitsoutreachobjectiveswithabudgetthatis9%ofthetotalenergyefficiencyprogrambudget.ThisadditionaldecreaseinfundingforenergyefficiencyoutreachandeducationiswarrantedbecauseNFGsenergyefficiencyprogramsarerelativelymatureanditwillbringtheseexpendituresinlinewiththoseofotherEEPSprogramadministrators.Wewillthereforeauthorizeatotaloutreachandeducationbudgetof$903,600forNFGsenergyefficiencyprograms,representingareductionof$596,400fromcurrentlyauthorizedlevels.Wedirectthatthe$596,400reducedfromoutreachandeducationbeallocatedtotheLIURPandresidentialrebateprogramsinamannerthatbringsthetotalfundingforLIURPequaltothatoftheresidentialrebateprogram.Directingalargershareofavailablefundstoprogramsforlowincomecustomersisreasonablegiventhedemanddemonstratedbypublic participationinthisproceeding,andtherelativelyhighproportionofincome-eligiblehouseholds inNFGsserviceterritory.AswithotherEEPSprograms,outreachandeducationprogramsshouldbeestablished,wherepractical,foreachEEPSprogram.Todeterminetotalprogramfunding,we CASES07-M-0548and07-G-0141-19-allocatethe$903,000outreachbudgetequallyamongthethreeprograms,resultingintotalprogrambudgetsasshowninthetablebelow.Thelargerthanproportionalshareofoutreachandeducationprogrambudgetsthatweallocatetothecommercialrebateprogramappearstobewarrantedbasedontheperformanceofthatprogramtodate.WealsodirectNFGtofile,within30days,aproposedoutreachandeducationplan,includingproposedbudgets 28,foreachofitsenergyefficiencyprograms,forapprovalbytheDirectoroftheOfficeofConsumerPolicy.Totheextenttheapprovedoutreachandeducationprogrambudgetsdifferfromtheproportionalallocationweassumeherein,fundingforprogramdeliverywouldbeadjustedaccordinglywithintheprescribedtotalprogrambudgets.ThefundinglevelsapprovedherewillmakeNationalFuelsoutreachbudgetscomparabletothoseofsimilarEEPSprograms.AuthorizedBudgetsw/O&EandEM&VfundsembeddedAuthorized%w/O&EandEM&VfundsembeddedEM&VBudgetforeachprogramEM&Vas%ofAuthorizedBudgetsCIPResidentialNaturalGas ApplianceRebates$4,063,67940.5%$203,184 5%CIPLowIncomeUsageReductionProgram(LIURP)$4,063,67940.5%$203,1845%Non-Residential Equipment ReplacementProgram(NRCIP)$1,912,64119%$95,6325%Total$10,040,000100%$502,0005%NFGrequeststhatitscurrentrebatescheduleberetainedbecauseitiseffectiveanditiscompatiblewiththeEEPSrebateschedule.Thisisareasonableproposalandisadopted.NFGhasemployedasurchargereconciliationprovision.Thiswillnotbecontinued,andNFGwillaccountforsurchargesinthesamemannerasotherutilitiesunder 28Theoutreachandeducationplanshouldcontaindetailedbudgetproposalsincluding:(a)specificbudgetamountsforeachindividualelementoftheO&E/marketingbudget;(b)alistanddescriptionoftheO&E/marketingvehiclestobeused;and(c)anexplanationofthe targetaudienceforeachprogramcomponent.

CASES07-M-0548and07-G-0141-20-EEPS.Elsewhereinthisorder,weclarifyrulesforcarryingbudgetsforwardandweauthorizeborrowingfromfutureyearsbudgetsunderlimitedcircumstances.NFGprogramshaveoperatedunderbudgets,buthavenothadcorrespondingsavingstargetsestablishedbytheCommission.WedirectStafftoworkwithNFGtodevelopspecificenergysavingstargetsforeachofthethreeCIPprogramsforcalendaryears2012through2015.NFGnotesthatNYSERDAprogramsarestatewideinnature,andsurchargescollectedfromNFGcustomersarenotguaranteedtobespentwithintheNFGterritory.Asdiscussedabove,thefundscollectedfortheNFG-specificprograms(i.e.,theCIPprograms)willcontinuetobespentexclusivelywithintheNFGserviceterritory.WithrespecttootherNYSERDAprogramsfundedthroughSBCsurcharges,wewillcontinueourpracticeofmaintainingaroughgeographicequitywithoutrequiringNYSERDAtomatchcontributionsandoutlaystoserviceterritoriesonadollarfordollarbasis.Toalargeextent,thedemandfor programswithinacommunity,andtheactivityoflocalorganizationstospreadinformationand facilitateparticipation,aremajorfactorsthatwillaffectthegeographicdistributionofoutlays.RegardingNFACsproposalthatincentiveprogramsshouldbereduced,theWhitePaperdiscussedtherangeofprogramdeliverymethodsutilizedintheEEPSportfolio,andtheimportanceofmaintainingareasonablebalance.Differentmethodswillbemoreeffectivewithdifferentcustomersectors,andweagreewithStaffthatthebalancereflectedinourcurrentportfolioisreasonable.TheanalysispresentedbyNFACwasspecifictotheNFGserviceterritory.Asdescribedabove,weareincreasingfundsforNFGswhole-houseprogramaccordingly.RegardingNFACsproposalthatNYSERDAshouldadministerallprograms,thisissuewasconsideredwhentheEEPSprogramswereinitiatedin2008,andwillnotberevisitednow.Argumentsbasedoncomparativeachievementsaredifficulttoevaluate:NYSERDAandutilityprogramshaddifferentstartingtimesandareorientedinmanycasestowarddifferent customersandefficiencymeasures.LightingDueinlargeparttoNYSERDAsmarkettransformationefforts,compactfluorescent(CFL)bulbsarenowwidelyavailable.EvaluationresultshaveshownthatduetothesuccessofNYSERDA'sCFLprogram,theCFLmarkethasbeenstrengthenedandNewYorkers CASES07-M-0548and07-G-0141-21-nowpurchaseCFLsregardlessofprogramactivity.Giventhesefactors,andtherecentupdatestolightingcodesandstandards,itisclearthatlightingeffortsneedtorefocusfromCFLstosolidstatelightingandothernewand/oremergingtechnologies.InitsT&MDoperatingplan,NYSERDAproposescontinuedtechnologyR&Dandinfrastructureandmarketdevelopmentforadvancedlightingtechnologies.InitscommentsNYSERDAalsoproposesmodifyingitsexistingCFLResidentialPoint-of-SalelightingprogramtofocusonLEDsandsolidstatetechnology,aswellasexteriorandspecialtyCFLbulbs,whichhavealargeremainingpotential.Inredesigningtheprogram,NYSERDAcitesseveralkeyfactorstotakeintoaccountincludinglackofcustomerawarenessaboutnewlightingtechnologyandstandards,andtheneedforproducttestingandstandards.NYSERDAhashadgreatsuccessinmakingCFLscost-effectiveandwidelyavailable.TheCFLResidentialPoint-of-Saleprogramnowrequiresretooling.NYSERDAisdirectedtofile,byDecember1,2011,anupdatedplanforitsResidentialPoint-of-Saleprogram includingitsapproachtoaddresscustomerawarenessandproducttestingandstandards.IntheinterimNYSERDAshouldnotinitiatefurtherCFL-relatedpromotionsunderthisprogram,butshouldworkwithStafftodeterminethetypesofadvancedlightingproductsthatcanbe supportedbytheprogram.NYSERDAshouldalsoworkwiththeImplementationAdvisoryGroup,asrecommendedintheWhitePaper,toassesshowotherEEPSprogramswithlightingcomponentsshouldbemodifiedtoreflectlightingtrendsanddevelopments.SectorbalanceTheUtilityInterventionUnitoftheDepartmentofState(UIU)observesthattheresidentialsector,whichrepresents39%ofelectricitysalesbyvolume,receivesonly19%ofEEPSprogramfunding.Fromtheoutset,wehavenotimposedastrictruleofproportionalitywithrespecttoEEPSfunding,becauseenergyefficiencybenefitsallcustomers.Sectorequityisonevaluetobeconsidered,amongmanyothers,inapprovingefficiencyprograms.

29 292008EEPSOrder,Appendix3,pg.3.

Ourprogramapprovalshavealsovaluedcost-effectivenesshighly,whichultimatelyworksinthebest interestofallcustomers.Anon-participatingresidentialcustomer,forexample,isbetterservediftheEEPSgoalismetattheleastcost,regardlessoftheportionoffundingallocatedto CASES07-M-0548and07-G-0141-22-residentialprograms.

30Takingthisintoconsideration,aswellastheneedforprogramcontinuityatthistime,wewillnotorderasubstantialreallocationoffundingamongsectors.Thisisnot,however,todismissthelegitimateconcernraisedbyUIU.Thebalanceoffundingamongsectorswillcontinuetobeconsideredasprogramrevisionsareproposedinthefuture.Therehasbeenasubstantialtimelagbetweenthecollectionofsurcharges,thecommitmentoffundstocustomerprojects,andtheactualexpenditureoffunds.NYSERDAprojectsacashbalanceofapproximately$397millionasofDecember31,2011forthecombinationofitsSBCandEEPSprograms.Thisbalanceincludesfundsthathavebeencommittedtoprojectsbutnotyetexpended.ManyNYSERDAprojectshavemulti-yearleadtimesbetweenapplication,commitment,andexpenditure.SurchargesAdifferent,thoughrelated,sumistheuncommittedbalanceofEEPS-onlyprogramsforalladministratorsincludingNYSERDAandutilities.AsofJuly1,Staffstatedthattherewasabalanceofover$300millioninuncommittedsurcharges,reflectingallEEPS programs,bothelectricandgas.Programadministratorscommentedthatthisnumberislikelytobemuchsmallerbytheendof2011asprojectcommitmentsincrease.TotaluncommittedbalancesasofDecember31,2011willnotbeknownwithcertaintyuntil2012.Staffrecommendedthatcollectionsshouldbebroughtintobetterparitywithexpendituresandcashbalances.StaffrecommendedagradualscalingbackofbalancesratherthananimmediatesuspensionofEEPSsurchargerecoveries.Staffsrationaleisthatmanyprogramshaveonlyrecentlybegunspendingmoneyattheirtargetrates,andmanyprograms havethepotentialtoexceedtheirtargetrates.Inordertomeetthe15by15goal,some programsmightneedtobeexpanded,ornewprogramsmightneedtobeauthorized.Thecosttoachieveenergysavingsmightincrease.UntiltheCommissiondetermineswhetheranyportfoliochangesareneededtoachieveitsgoal,Staffstateditisprematuretosuspendorreduce surcharges.Moreover,surchargebalances,andthereasonsforsurchargebalances,varywidely amongprogramsandamongprogramadministrators.Someprogramsmayhavesurplusbalancesbecauseofthetimelag,butmaybeabletoeliminatethebalancethroughhigh 30Ourincreaseinallocationtolowincomeprogramstakesthelevelofresidentialsalesintoaccount.

CASES07-M-0548and07-G-0141-23-performance.Staffrecommendedthatmodificationofsurchargerecoveriesshouldbeconsideredafteranotheryearofexperienceisgained.AmajorityofcommenterssupporttheStaffrecommendation.Programadministrators,contractors,andpublicinterestgroupsemphasizedtheneedforcontinuityatthistime,aswellasthepossibilitythatthesurchargebalancecouldbesubstantiallyreducedbytheendof2011.AcontraryviewwastakenbyUIUandMI.UIUagreeswithStaffthatanacross-the-boardreductioninsurchargesisimpractical;nevertheless,asurchargebalanceofthissizeshouldnotbemaintainedduringatimeofeconomichardship,andareasonablealternativetoanacross-the-boardreductionshouldbeimplemented.MIarguesforcomprehensivereductionsinsurchargelevels,aspartofareductionintheoverallsizeoftheEEPSprogram.AccordingtoMI,thecurrentsurchargebalanceshouldbedealtwithinthatcontext,reducingthebalancewhilesimultaneouslyreducingprogram budgetlevels.Withrespecttocashbalances,NYSERDAsbalancecanbereducedtonearzerowithnoadverseeffectonprograms.BecauseSBCcollectionsweresuspendedin2011,asubstantialincreaseincollectionswouldordinarilyoccurin2012asSBCcollectionsresume.ReducingNYSERDAscashbalancecanmitigate2012collectionsandavoidanincreasethatwouldotherwiseoccur.2013and2014collectionscanlikewisebymitigatedbyafurtherreductionofNYSERDAscashbalance.RegardinguncommittedEEPSauthorizations,therearefourgeneraloptions.Atoneextreme,authoritytospendthosefundscouldsimplyberolledforward,tobespentasfullyaspossiblebyprogramadministratorsinadditiontotheannualbudgetsbeingapprovedinthisorder.Theconsequenceofthisapproach,iftheentirebalancewerespentinadditiontothebudgetsapprovedinthisorder,couldbetoexceedour2015goalsubstantially,butatatotalcosthigherthanwouldhavebeenneededtomeetthe2015goal.Theoppositeapproachwouldbetoorderanimmediaterefundtocustomers,oncethesizeofuncommitted2011balancesisknown.Theconsequenceofthisapproachwouldbeanimmediatereductioninsurcharges,beyondtheavoidanceofincreasesaccomplishedbyreducing cashbalances,withtheriskthatthebudgetsapprovedfor2012-2015willbeinsufficienttomeetthetargetsapprovedinthisorder.ThisinturncouldforcetheCommissioninthefutureeithertoraisesurchargesortoabandonthe2015goal.

CASES07-M-0548and07-G-0141-24-Twointermediateapproachesare:(1)refundthebalancestocustomersoveraperiodofyearsinamannerthathelpstolevelizecollectionschedules;or(2)retainthebalancesforaperiodoftimeuntilourcosttoachievethe2015goalhasbeenfurtherclarified,andusethebalancestomitigatefuturecollectionsiftheyarenotneededtoachieveefficiencygoals.Thesetwointermediateapproachesarenotmutuallyexclusive.Themostimmediateneed,andopportunityforcollectionreductions,istoreduceunnecessarycashbalances.Thiscanbedonewithoutexcludingthepossibilitythatuncommittedfundsmightultimatelybeneededtomeetthe2015goal.AsStaffhaspointedout,wearelikelytohavebetterinformationregardingthecosttoachievethe2015goalafterprogramshavebeeninfulloperationforanotheryear,andaftertheimpactsoflightingstandardshavebeendetermined.In2012wewillalsohaveafinalfigureonuncommittedbalances.Itwouldbeunwisetoforfeittheflexibilitythatmaybeneededasweprogresstowardthe2015goal.Aflexible,intermediateapproachisthemostreasonable.Wewillorderarevisionincollectionschedules,designedtoreducecashbalances.

31Thismeasurewillreducecollectionsbelowbudgetauthorizationlevelsbyapproximately$284millionin2012,$198millionin2013,and$33millionin2014.Inaddition,weemphasizethatwearenotauthorizing theexpenditure,duringthe2012-2015period,ofuncommittedfundscollectedpriortoJanuary1,2012.32Aprogramadministratormayfileapetitionforsuchauthorizationforparticularprograms.Uncommittedfundsasusedhereexcludesadministrativeandevaluationexpensesaswellaspre-committedfunds,i.e.fundsallocatedtoacompletedapplicationwhichhasbeendeterminedtomeetbasiceligibilitycriteriabutforwhichtheprogramadministratordoesnothaveinhandanexecutedcontract.Elsewhereintheorderweadoptrulesforcarryingfundsforwardfromyeartoyear,andforborrowingfromfutureyearbudgets.Thecarry-forwardrulewillnotapplytouncommittedfundsinthetransitionfrom2011to2012, 33 31TheseschedulesaredetailedinAppendix2.andimplementation 32Exceptionstothisruleare:anyfundsauthorizedinorderspriortoOctober13,2011andscheduledtobecollectedsubsequenttoDecember31,2011;anduncommittedfundsfrom NYSERDAsgas-fundedEmPower,LowIncomeMultifamily,andLowIncomeSingle Familyprograms,whichmaybeutilizedtofundtheincreaseinNYSERDAsEmPower program,asdiscussedabove.

33Asdiscussedabove,threeNYSERDAlow-incomeprogramswillbeauthorizedtocarry uncommittedbalancesforwardinto2012.

CASES07-M-0548and07-G-0141-25-oftheborrowingruleswillnottakeintoaccountsuchuncommittedfunds.Weintendtoreviewprogresstowardthe2015goalandtheprojectedcosttoachievethegoal,withinatimeframethatwillallowuncommittedfundstobeusedtoreducecollectionsor,ifneeded,tobeallocatedtoprogramstowardtheachievementofthegoal.Accordingly,werequireallprogramadministratorstoprovideanaccountingreportnotlaterthanMarch31,2012,ofuncommittedbalancesforelectricandgasprograms.TheaccountingreportshallincludetotalcollectionsfromtheinceptionofeachEEPSprogram(includingSBCprogramsincorporatedintoEEPS);totalactualexpenditures;totalcommitments(includingfundsallocatedtoacompletedapplicationwhichhasbeendeterminedtomeeteligibilitycriteriabutforwhichtheprogramadministratordoesnothaveanexecutedcontract);andtheresultinguncommittedbalancesforeachprogram,respectively.Inaddition,toinformanyfuturechangestothecollectionschedulethatwemaydeemappropriate,eachprogramadministratorshallfile,notlaterthanJune30ofeachyearfrom2012through2015,aforecastofestimatedend-of-yearcashbalances,expenditures,and commitments,through2018.Althoughtargetsandbudgetsaresetonanannualbasis,programparticipationrateswillnotbeconstant,foravarietyofreasons.Someprogramsareseasonalinnature;some takelongerthanotherstodevelopcustomerrecognitionorcontractorreadiness;someinvolvemulti-yearplanningandimplementation.YeartoyearbudgetingandaccrualaccountingStaffrecommendsthatbothspendingandenergysavingsshouldbecountedonacommitmentaccrualbasis;thatis,intheyearinwhichthespendingiscommitted.Staffalsoproposesclarifyingtherulesforbankingandborrowingfundsfromyeartoyear.TheJointUtilitiesarguethatmoreflexibilityisneeded,andenergysavingsshouldbesubjecttobankingandborrowingofupto33%overathree-yearperiod.Bankingand borrowingofenergysavingsarerelevantprimarilytoshareholderincentives.Inlightofour intentiontoreviseincentives,describedbelow,theutilitiesproposalmaybemoot.Ifnot,itcanbeaddressedatthetimeafinaldecisionismaderegardingincentives.Totheextentthatbankingandborrowingofsavingswouldbeutilizedsolelyforreportingpurposes,independentof incentives,wedonotfavorit;itpresentstheriskofprogramsfallingfarbehindtargets.

CASES07-M-0548and07-G-0141-26-NYSEG/RG&Esupporttheuseofaccrualcommitmentaccounting.

34Withrespecttotheuseoffundsfrompreviousorfuturebudgetyears,therearetwoissues.Firstistheabilitytorolloverunusedfundsfromoneyeartothenext.Secondistheabilitytoborrowfromfutureyearswhereaprogramisfullycommittedandthereisunmetdemand.NYSERDAsupportstheuseofaccrualcommitmentaccounting,butaddsthatreportingwillalsobeneededonanas-acquiredbasis,asevaluationwillbeperformedonthatbasis.TheAssociationforEnergyAffordability(AEA)alsosupportsaccrualaccounting.Withregardtothefirst,Staffrecommendedastraightforwardrule.Bothspendingandsavingswillbeaccountedforonacommitmentaccrualbasis,i.e.theywillbecountedinthe yearinwhichthespendingiscommitted.Unspentoruncommittedfundswillremainavailablebeyondtheyearforwhichtheywereoriginallybudgeted,untilDecember31,2015.Thiswillallowprogramadministrationandimplementationtobeperformedwithoutinterruption.TheJointUtilities,NYSEG/RG&EandNYSERDAsupporttheStaffrecommendation.Wewill adopttheStaffrecommendation,withanexceptionregardingbalancesremainingasofDecember31,2011,asdiscussedabove.Thesecondissue-borrowingfromfutureyears-presentsmoreconcerns.

35 34NYSEG/RG&Ehaveconcernsabouttheimpactonutilityincentives.Thefactthataprogramhasoverspentitsbudgetwilloftenbeanindicationofsuccess,butmightalsoindicatethatcustomerincentivesaretoohigh.Moreover,evenwheretheprogramisasuccess,thereareconcernsofmaintainingportfoliobalance,aswellasensuringthatprogramcommitmentsdonotoutpacesurchargeauthorizations.Takingthoseconcernsintoaccount,Staffproposedasetofrulesunderwhichprogramadministratorsshouldbeallowedtoborrowfundsfromfuturebudgetyears.

35OnAugust18,2011,weaddressedapetitionofCentralHudsonrequestingauthoritytoborrowfrom2012budgetstomaintainprogressintwosuccessfulprogramsthatwould otherwisehaveexhaustedtheirfundsin2011.Wenotedthattherewereasyetno2012 budgetsfromwhichtoborrow;buttoavoidinterruptionofsuccessfulprograms,weincreasedby$3.5millionthe2011authorizationfortwoprograms.Case07-M-0548,OrderAuthorizingIncrementalCommercialElectricEnergyEfficiencyProgramFundsfor2011, effectiveAugust18,2011 CASES07-M-0548and07-G-0141-27-NYSERDAandNYSEG/RG&EgenerallysupporttheStaffrecommendation.

36WefindthattheflexibilityincludedinStaffsrecommendationrepresentsareasonablebalanceagainsttheriskofprematuredepletionofprogrambudgets,andtheriskthatborrowingmaybeneededsimplybecauseincentivesaretoogenerous.WewilladoptStaffsrecommendationtoallowforborrowingfromfutureyears,underthefollowingrestrictions:NYSERDAnotesthatadditionalflexibilitymaybeneededinthecaseofprogramswithlongleadtimes,wherepost-commitmentchangesmightbenecessary.TheJointUtilitiesarguethatborrowingofupto33%overathree-yearperiodshouldbeallowed,toincreaseflexibility.AEArecommendsthattargetsshouldbesetovermulti-yearperiodstoavoidtheseissues.(1)intenttoexceedtheannualbudgetforaprogrammustbefiledwiththeSecretaryfourweeksinadvance;theDirectorofOEEEmayallowanexceptiontothisruletoprovideforminorend-of-yearexceedances;(2)inatimelymanner,asdeterminedbytheDirectorofOEEE,theprogramadministratormustsubmitananalysisofwhetherextraordinaryspendinglevelsare drivenbycustomerincentivesthataretoohigh,includingcomparisonwithincentivesforsimilar programsrunbyotherprogramadministrators;(3)subjecttosuchfilingandanalysis,aprogrammaybeoverspentby20percentperyear;(4)withtheconcurrenceoftheDirectorofOEEE,a programmaybeoverspentbymorethan20percentperyear;(5)inaggregateforelectricityorforgas,aprogramadministratorsEEPSannualbudget(includinganycarryoversfromprioryears)maynotbeoverspent,exceptthatwiththeconcurrenceoftheDirectorofOEEE,aggregatespendingmayincreaseto110percent,providedthattheprogramadministratorhaspresentedaplanforrestoringaggregatespendingtonomorethan100percentbyDecember31,2015,whichplanmustdemonstratemaintenanceofabalancedportfolio;and(6)eachprogramadministratorwillnotifytheDirectorofOEEEwhenaggregatespendingforabudgetyearreaches80percent.OurOrderConcerningUtilityFinancialIncentives(2008IncentivesOrder)establishedamechanismtoholdutilitiesaccountableandrewardthemforexcellentUtilityshareholderincentives 36NYSEG/RGEproposethatborrowingshouldbeallowedtoexceed120%foranindividualprogramifthefundswillbereallocatedfromanunderperformingprogramwithinthesamecustomerclass.Thiswouldextendtheproposedborrowingruletoborrowingamong programs,whichraisesadditionalissuesandwillnotbeadoptedhere.

CASES07-M-0548and07-G-0141-28-performance.

37OnAugust18,2011weconsideredwhethertomodifythecalculationforrewardofincentivesfortheperiodendingDecember31,2011.Followingourappraisalofestimatedresults,wedeterminedthatpositiveandnegativeincentiveadjustmentsshouldbeawarded,andthatutilitieswouldhavetheopportunitytodemonstratetheimpactoftheeconomicrecessionon theirperformance.TheWhitePaperexpressedconcernovertheapplicationofthismechanismtoutilityperformanceinthe2008-2011period,aswellasthecontinuationofthemechanismin2012-2015.

38Thequestionthatwetakeuphereiswhat,ifany,changesshouldbemadetotheincentivemechanismgoingforwardintothe2012-2015period.TheWhitePaperstatedthat incentiveshadsucceededingainingtheattentionofutilitymanagement;butthepaperrecitedanumberofwaysinwhichtheexistenceofincentivesseemedtobehavingcounterproductiveeffects.Staffrecommendedeliminatingtheincentivemechanism,subjecttoareassessmentpriortotheendof2012.Commentsonthisissuepresentawiderangeofviews.TheJointUtilitiessupporttheideathatincentivesshouldberedesignedduring2012.Thisapproachshouldbeinformedbyefficiencypotentialstudiesprovidingmorerealistictargetsandcostestimates.Duringtheinterim,positive-onlyincentivesshouldbeinplace,tomaintainmotivationforutilities.CentralHudsonaddsadiscussioninitsindividualcomments.CentralHudsonstronglydisagreeswithStaffsassessmentoftheimpactsofincentivesonutilitybehavior.AccordingtoCentralHudson,manyoftheproblemsattributedbyStafftoutilitymotivationsareactuallytheresultofalackofpotentialstudiestosetrealistictargets,orthefailuretoestablishclearboundariesbetweenutilityandNYSERDAprograms,orthefailuretoproperlyaccountfornon-energybenefitsintheincentivemechanism.CentralHudsonstatesthatanincentiveprogramshouldbedesignedtakingthesefactorsintoaccount.Pace/NRDC/NEEParestronglyopposedtotheeliminationofincentives.TheyarguethatmanyoftheproblemsrecitedbyStaffactuallyresultfromlackofflexibility,lackof 37Case07-M-0548,OrderConcerningUtilityFinancialIncentives(issuedAugust22,2008) 38Case07-M-0548,etal,OrderGrantingRehearing,ReaffirmingUtilityShareholderIncentivesfor2009through2011,andAdjustingCertainProgramTargetsandBudgets(issuedAugust22,2011).

CASES07-M-0548and07-G-0141-29-clearlydefinedrolesforNYSERDAandtheutilities,anddelaysinprogramapproval.Althoughrevenuedecouplingmechanismsremovedisincentivesforutilities,theydonotprovideaffirmativeincentives.TheNationalAssociationofEnergyServiceContractors(NAESCO)agreesthatthecurrentincentiveregimeiscounterproductive.NAESCOalsocautionsthatacollaborativeinitiativetorevisetheincentivesthreatenstotakeaninordinateamountoftimeandattention.NAESCOrecommendsthatutilitiesshouldbeallowedamodestadministrativefee,andthattheirefficiencyprogramexpendituresshouldbecapitalized,withrecoverycontingentonafindingthattheyhaveproducedsavings.NYSEG/RGEsupporttheStaffrecommendationtoeliminatetheincentivemechanism;moreover,theyarguethattheeliminationshouldbepermanent.NYSEG/RGEarguethattheexistingregulatoryrelationshipbetweenutilitiesandtheCommissionisadequatetoensureastrongeffortbyutilitiestomeetefficiencygoals.Totheextentthatanincentive systemwillincludenegativeadjustments,itwillneverbefairtoimposethatriskonutilities where,asinthecaseofenergyefficiency,mostofthefactorsdeterminingsuccessareoutoftheutilitiescontrol.

39MultipleIntervenorsalsosupportStaffsrecommendation,buttheydonotrecommendreconsideringincentivesfollowing2012.MIarguesthatutilitiesshouldnotneedanincentivetoperformataskassignedtothembytheCommission,andagreeswithStaffthatincentiveshavegivenrisetoskewedmotivations.UIUagreesthattheincentivemechanismshouldbereformed,butdoesnottakeapositiononwhetheritshouldbeeliminatedintheinterimperiod.Efficiencycontractors,whoworkdirectlywithutilitiesandNYSERDA,providevaryingviewsonthisissue.WilldanEnergySolutionsadvocateseliminatingnegativeincentives,toresolvemostoftheissuesidentifiedbyStaff,butmaintainingpositiveincentivestomotivateutilities.CommunityEnvironmentalCenter(CEC)findsitdishearteningthatincentiveargumentshavebecomeadiversionfromtheimportanttaskofmeetingefficiencygoals,andstatesthatinitsexperienceConEdisonhasmadeitsbesteffortstoachievetargetsdespite regulatorydelays.CECrecommendsthatperhapsutilitiesshouldbegivenanoptionwhetheror 39Forexample,customerswillingnesstoparticipate.

CASES07-M-0548and07-G-0141-30-nottoparticipateinincentivesinthe2012-2015period.TheAssociationforEnergyAffordabilityfullyagreeswiththeStaffrecommendation,statingthatincentiveshaveencourageddefensivebehaviorratherthaninnovativebehavior.Inthe2008IncentivesOrder,westated,Asutilitiesgainexperienceinprogramplanningandimplementation,otherapproachestoincentivescouldbeconsidered.

40Weexpectdiligentandcapableperformancefromutilities,inallareassubjecttoourorders.Inmanyfieldsofutilityactivity,ourexpectationofperformance,coupledwiththepotentialforprudenceadjustmentsorpenaltyactions,issufficient.Insomeareasofactivity, suchasreliabilityandcustomerservice,weemploymetricstiedtopotentialrevenueadjustmentstospurperformance.WeagreewithStaffthattheincentivemechanismascurrentlyconfiguredneedstobeimproved.Thisisnottostatethatincentiveshavenothadapositiveeffect;itisimpossibletomeasurewhatthestatusoftheEEPSprogramswouldhavebeenintheabsenceofanincentivemechanism.AsStaffnotes,withoutquestiontheincentiveshavemadesuccessfulefficiencymeasuresahighpriorityforutilitymanagement.Yetincentivesappeartohavehadcounter-productiveeffectsas well.Becauseofthehighprioritythatweplaceonefficiency,wecontinuetoholdthatefficiencyisanactivitythatwarrantsanincentivemechanism.However,Staffhaspersuadedusthattheinteractionandcooperationinvolvedinrefiningtargetsandadministeringprogramscanbeadverselyaffectedbyametricthatleadsdirectlytonegativeadjustments.Forthatreason,weintendtoenactanincentivemechanismthatcontainsonlypositiveadjustments.Thecurrentmechanisminitiatespositiveincentivesat80%achievementoftargets.Intheabsenceofametricfornegativeadjustments,itismorereasonabletorewardutilitiesonlyforachieving100%oftheirtargets.Theabsenceofaspecificmetricfornegativeadjustmentsdoesnot,however,implyanydiminutioninourexpectationofperformancefromutilities.TherearenumerousoptionsavailabletotheCommissionwhereautilitysperformanceisdemonstrablypoor,includingdisallowancesoradjustmentstoreturnonequityinratecases,andpenaltyactions.

40Case07-M-0548,OrderConcerningUtilityFinancialIncentives(issuedAugust22,2008),pg.35.

CASES07-M-0548and07-G-0141-31-Anotherimportantfactorindevisinganincentivemechanism,ashighlightedbyStaff,istheneedforbettercooperationamongprogramadministrators.Towardthatend,weenvisionatwo-stepincentivemechanism,withthefirststeporientedtowardindividualutilityperformanceandthesecondsteporientedtowardachievementofourstatewidejurisdictionalgoal.Underthesecondstep,thepotentialforeachutilitytoearnanincentivewouldbetieddirectlytotheabilityofprogramadministratorsasawholetoachieveourgoal.Theperiodoverwhichincentivesarecalculatedisanotherconcern.Inourincentivesorderof2008,wespecifiedthatincentiveswouldbecalculatedannually,inordertoprovideaccountabilityonaregularbasis.Subsequentordersrevisedthissothatincentiveswillbecalculatedthrough2011.Todiscourageshort-termdecision-makingbyutilities,weareinclinedtocalculateutility-specificincentivesonafour-yearbasis,i.e.,individualincentiveswouldbeawardedbasedonachievementof100%ofautilitysaggregatetargetfrom2012through2015.Monthlyreportsandothermechanismswillallowustoreviewprogressinthe interim,andtakeactionifprogressappearstobeunsatisfactory.Thesecondstageincentive wouldbeawardedbasedontheachievementofourjurisdictionalgoalof11.2millionMWh,i.e.fromtheinceptionofSBC/EEPSthrough2015.Thetotalpotentialadjustmentsinourcurrentincentivestructurearebasedonanestimateof20basispointsperyearforallutilities.Inpractice,thefiguresatstakeforindividualutilitieswerecloserto10basispointsperyear,duetothelevelofprogramtargetsassignedtoNYSERDA.Usingcurrentprojections,basingincentivesforutilitiesona5basispointfigurewouldcreatetotalopportunitiesoverafour-yearperiodofapproximately$36millionforelectricutilitiesand$14millionforgasutilities.Becausetheproposedmechanismwouldonlyawardpositiveincentives,itmaybemorereasonabletoutilizeasmallertotalincentivepoolthanweutilizedinthepast.Underthestructurethatweenvisionhere,thetotalswouldbeawardedifeachutilityachieves100%ofitstargetand100%ofthestatewidegoalisachieved.

41Wewillnotadoptanewincentivemechanisminthisorder.Weintendtodoso,alongthelinesdiscussedhere;however,wewillseekfurtherinputfrominterestedpartiesbeforeproceeding.WewilldirecttheSecretarytoestablishanoticeandcommentperiod,oranother 41Becausethereiscurrentlynostatewidegasgoalfor2015comparabletothe15by15goalforelectricity,theapplicabilityofthesecondstageincentivetogaswouldrequirefurther deliberation.

CASES07-M-0548and07-G-0141-32-appropriateprocess,whichshouldbeconcludedintimeforustoenactanewmechanismwithinthefirstquarterof2012.Wheneveranewmechanismisadopted,weintendthatitwillbeeffectiveasofJanuary1,2012.Intheinterim,asofJanuary1,2012,therewillbenoincentivemechanismintheabsenceofafurtherorder.Ourproposalforanewincentivemechanism,tobeeffectiveJanuary1,2012,isoutlinedinAppendix4,andwillbeissuedforcomment.AcoalitionknownastheGreenGroupEnergyCollaborationProgram(GREENCO)proposesaninitiativetoleveragepublicdollarswithprivateinvestmentto acceleratetheadoptionofefficiencymeasuresintheStateshospitals.GREENCOparticipantsrepresentawiderangeofinterestsincludingthehospitals,NYSERDA,utilities,majorfinancialinstitutions,andenergyefficiencyadvocates.AccordingtoGREENCO,theapproximately200hospitalsinNewYorkspend$620millionannuallyonenergybills,andtheirenergyuseistypically2.5timesgreaterpersquarefootthanthatoftheaveragecommercialbuilding.HospitalprogramproposalGREENCOsuggeststhatanEEPSprogramspecificallydesignedforhospitalsshouldbeadopted.TheprogramshouldbedesignedtotakeadvantageoftheopportunitiesforcollaborationandleveragedfinancingrepresentedbytheGREENCOcoalition.Atthistime,GREENCOhasnotmadeaspecificproposal.WeencourageGREENCOtodevelopaproposal, andwedirectStafftoworkwithGREENCOrepresentativestoprovideguidance.Anissueonwhichwearenottakingactioninthisorder,butwhichengenderedagreatdealofcommentamongparties,isStaffsproposaltoexpandeligibilitytosomecategories ofinterruptiblegascustomers.Alargemajorityofpartiesindicatedsupportforthisproposal,orsomevariationonit,andmanyindicatedawillingnesstoworkwithStafftorefinetheproposal.WedirectStafftoworkwithstakeholdersanddevelopaspecificproposalonthisissue,forourconsiderationatthesoonestdatepractical.InterruptiblegascustomersTheWhitePaperdiscussednumerousissuesrelatedtoimprovingtheEEPSprogram,butrecommendedthatmanyshouldbeaddressedbytheCommissionovertime.Wehaveadoptedthatapproach.Itisourintentiontoconsidertheseissues,totheextentpracticalOtherissuesdiscussedintheWhitePaper CASES07-M-0548and07-G-0141-33-andtotheextentthatCommissionactionwouldservethegoalofcontinuousimprovementoftheoverallEEPSprogram.SEQRAFINDINGSPursuanttoourresponsibilitiesundertheStateEnvironmentalQualityReviewAct(SEQRA),inconjunctionwiththisorderwefindthatprogramsapprovedherearewithintheoverallactionpreviouslyexaminedbyusinCase07-M-0548andwillnotresultinanydifferentenvironmentalimpactthanthatpreviouslyexamined.Inaddition,theSEQRAfindingsoftheJune23,2008orderinCase07-M-0548areincorporatedhereinbyreferenceandwecertifythat:(1)therequirementsofSEQRA,asimplementedby6NYCRRpart617,havebeenmet;and(2)consistentwithsocial,economic,andotheressentialconsiderationsfromamongthereasonablealternativesavailable,theactionbeingundertakenisonethatavoidsorminimizesadverseenvironmentalimpactstothemaximumextentpracticable.CONCLUSIONWiththisorderweauthorizeenergyefficiencyprogramsandassociatedbudgetsandsurcharges,asdescribedherein.TheCommissionorders

1.SystemBenefitsCharge(SBC)fundingforEnergyEfficiencyPortfolioStandard(EEPS)programstobeadministeredbyCentralHudsonGas&ElectricCorporation(CentralHudson);ConsolidatedEdisonCompanyofNewYork,Inc.(ConEdison);NewYorkStateElectricandGasCorporation(NYSEG);NiagaraMohawkPowerCorporationd/b/aNationalGrid(NiagaraMohawk);OrangeandRocklandUtilities,Inc.(O&R);RochesterGasandElectricCorporation(RG&E);CorningNaturalGasCorporation(Corning);KeySpanGas EastCorporationd/b/aNationalGrid(KEDLI);TheBrooklynUnionGasCompanyd/b/aNationalGridNY(KEDNY);NationalFuelGasDistributionCorporation(NFG);St.LawrenceGasCompany,Inc.(St.Lawrence);andNewYorkStateEnergyResearchandDevelopment Authority(NYSERDA)isapprovedbyprogramassetforthinAppendix1ofthisorder.The annualprogrambudgets,evaluationbudgets,andenergysavingsgoalsfortheprogramsshallbeassetforthinAppendix1ofthisorder.IntheeventthattheenergysavinggoalsforanyprogramidentifiedinAppendix1arerevisedbytheCommission,inanorderpriorto CASES07-M-0548and07-G-0141-34-December31,2011,withrespecttotheperiodendingDecember31,2011,suchrevisedgoalswillbeautomaticallyincorporatedintothetablessetforthinAppendix1.InthecaseofNYSERDA,theannualNewYorkStateCostRecoveryFeebudgetsshallbeassetforthinAppendix1ofthisorder.FundingmaynotbereallocatedamongprogramswithoutfurtherapprovalbytheCommission,exceptthatflexibilityfortheutilityadministratorstoimplementlimitedreallocationsforallprogramsintheirportfoliosundercertaincircumstances,previouslyadoptedbytheCommission,whichflexibilityiscontinued.2.Within60daysofissuanceofthisorder,NYSERDAshallsubmittotheSecretaryasupplementalrevisiontotheSBCOperatingPlan.ThesupplementalrevisionshallincorporatechangestoNYSERDAsapprovedEEPSprogramsmadeinthisorder,andshallcomplywithguidelinespreviouslyprovidedbytheDirectoroftheOfficeofEnergyEfficiencyandEnvironmentandpriordirectivesfromtheCommission.3.Within60daysoftheissuanceofthisorder,CentralHudson,ConEdison,NYSEG,NiagaraMohawk,O&R,RG&E,Corning,KEDLI,KEDNY,NFG,andSt.LawrenceshallsubmittotheSecretarysupplementalimplementationplans(forNFGthiswillbeanewrequirement).ThesupplementalimplementationplansshallincorporatechangestotheirapprovedEEPSprogramsmadeinthisorder,andshallcomplywithguidelinespreviouslyprovidedbytheDirectoroftheOfficeofEnergyEfficiencyandtheEnvironmentandpriordirectivesfromtheCommission.4.Flexibilityastothetypesofmeasuresandthelevelofparticularfinancialinducements/incentives/rebatesshallcontinueaspreviouslyapprovedbytheCommission.5.BeginningJanuary1,2012,eachprogramadministratormayencumberfundsfromabudgetauthorizedforthefollowingcalendaryear,subjecttotherestrictionsandprocessesdetailedinthebodyofthisOrder.6.Beginningwithcalendaryear2012budgets,eachprogramadministratormaycarryforwardanyunusedbudgetallocationintothefollowingcalendaryear,providedthatunusedallocationsincalendaryear2015maynotbecarriedforwardinto2016withoutspecificauthorizationfromtheCommission;andprovidedthatfundscarriedforwardwillnotbe transferredtoadifferentprogram,excepttotheextentotherwiseallowedbyordersofthe Commission.7.Onnotlessthansixmonthsnotice,NYSERDAshallfilewiththeSecretaryanoticeregardinganyanticipatedshortfallinfundingforitssupplementalgas-fundedEmPower CASES07-M-0548and07-G-0141-35-program.Forpurposesofthisclause,ashortfallinfundingisdefinedasapointatwhichavailablefundswillbecomeinsufficienttooperatetheprogramatthebudgetlevelidentifiedinAppendix1,Table9ofthisorder.Includedinthisfilingwillbemonthlyprogramlevelexpendituresandcommitments,andthenumberofapplicationsreceivedandaccepted,fortheprevious12monthsandprojectedforthefollowing12months.8.CentralHudson,ConEdison,NYSEG,NiagaraMohawk,O&R,RG&E,Corning,KEDLI,KEDNY,NFG,St.LawrenceandNYSERDAshalleachincorporatereports ontheseprogramsintotheperiodicquarterlyprogramandevaluationreports,annualprogramreportsandevaluations,andmonthlyscorecardreportsalreadyrequiredfortheEEPSprogramstheyadminister(forNFGthiswillbeanewrequirement).9.InthesupplementalrevisionstotheSBCOperatingPlan,andinthesupplementalimplementationplans,CentralHudson,ConEdison,NYSEG,NiagaraMohawk,O&R,RG&E,Corning,KEDLI,KEDNY,NFG,St.LawrenceandNYSERDAaredirectedto alsoincludethefollowinginformationrelatedtotheiroutreachandeducation(O&E)/marketing programsand,ifnecessary,tosubmitnewbudgets:(a)specificbudgetamountsforeachindividualelementoftheO&E/marketingbudgetfor eachyearoftheprogram;(b)alistanddescriptionoftheO&E/marketingvehiclestobeused;(c)anexplanationofthetargetaudiencesforeachprogramcomponent;(d)atimelineforthedevelopment,implementationandevaluationoftheO&E/marketingefforts;(e)howtheO&E/marketingprogramsrelatetotheentitysgeneralandotherO&E/marketingprograms;and(f)theeffortsthatwillbeundertakentominimizeanyoverlapand/orcustomerconfusionthatmayresultfromO&E/marketingactivitiesinthesameoradjacentmarketareas.10.AllO&E/marketingplancomponentsofthecompliancefilingswillbesubjecttoreviewandcertificationbytheDirectoroftheOfficeofConsumerPolicythattheyconformtotherequirementsofthisorder,beforetheyshallbeimplemented.11.CentralHudson,ConEdison,NYSEG,NiagaraMohawk,O&R,andRG&EshallestablishbycontractwithNYSERDA,ascheduleofpayments,nolessfrequentlythanquarterlycommencingJanuary1,2012,totransferelectricSBCfundstoNYSERDAforNYSERDA-administeredprogramsassetforthinAppendix2,Table3ofthisorder.

CASES07-M-0548and07-G-0141-36-12.CentralHudson,ConEdison,NYSEG,NiagaraMohawk,O&R,RG&E,KEDLI,KEDNYandNFGshallestablishbycontractwithNYSERDA,ascheduleofpayments,nolessfrequentlythanquarterlycommencingJanuary1,2012,totransfergasSBCfundstoNYSERDAforNYSERDA-administeredprogramsassetforthinAppendix2,Table7ofthisorder.13.TheelectricSystemBenefitsCharge(SBC)isaugmentedsuchthatbeginningonJanuary1,2012,thelevelofoverallSBCelectricrevenuecollectionsissupplemented,tobecollectedinthemannershowninTable4ofAppendix2.14.ThegasSystemBenefitsCharge(SBC)isaugmentedsuchthatbeginningonJanuary1,2012,thelevelofoverallSBCelectricrevenuecollectionsissupplemented,tobecollectedinthemannershowninTable8ofAppendix2.15.Eachutilityaffectedbythisordershallfiletariffamendmentsand/orstatementsonnotlessthan30days'noticetobecomeeffectiveJanuary1,2012,incorporatingtherevisionsdescribedherein.TherequirementsofSection66(12)(b)ofthePublicServiceLaw astonewspaperpublicationofthechangesproposedbythesefilingsiswaived.16.TheprogramsintheConservationIncentiveProgramofNFGwillbesubjecttotherulesandordersgoverningtheEnergyEfficiencyPortfolioStandardprograms,undertheconditionsdescribedinthisOrder,effectiveJanuary1,2012.17.NFGshallfiletariffamendmentsand/orstatementsonnotlessthan15days'noticetobecomeeffectiveDecember1,2011,incorporatinganextensionuntilDecember31,2011,ofitsexistingenergyefficiencyprograms.TherequirementsofSection66(12)(b)ofthePublicServiceLawastonewspaperpublicationofthechangesproposedbythesefilingsiswaived.18.Within30daysoftheeffectivedateofthisorder,NFGshallfileoutreachplansforeachofitsthreeprograms,conformingtotherequirementsspecifiedinclause(9)above.19.ThebudgetsapprovedinthisorderaretobefundedbyanSBC;theydonotrepresenttraditionalrateallowancesinthesensethatanyunder-spendingshallresultintheutilitydrawingdownlessmoneyfromtheSBCcollections.Efficienciesinthatregardareforthe benefitofratepayers,notshareholders.CentralHudson,ConEdison,NYSEG,NiagaraMohawk,O&R,RG&E,Corning,KEDLI,KEDNY,NFG,St.LawrenceandNYSERDAshall CASES07-M-0548and07-G-0141-37-managetheEEPSandSBCfundsprudentlyandwithinthebudgetsauthorizedbytheCommission.20.NotlaterthanMarch31of2012,eachprogramadministratorshallfilewiththeSecretaryanaccountingofuncommittedbalancesattheendofthepreviouscalendaryear,asdescribedinthebodyofthisorder.21.NotlaterthanJune30of2012andofeachyearthereafterthrough2015,eachprogramadministratorwillfileaforecastofend-of-yearcashbalances,expenditures,andcommitments,asdescribedinthebodyofthisorder.22.Annualaccountingforprogramssubjecttothisordershallbeperformedonanaccrualandcommitmentbasis,asdiscussedinthebodyoftheOrder.23.Within90daysoftheeffectivedateofthisorder,eachelectricutilityadministeringEEPSprograms,notpresentlyofferingaBlockBiddingprogram,shallsubmitafilingwithrespecttoBlockBiddingprogramsasdiscussedinthebodyofthisorder.24.OnorbeforeDecember1,2011,NYSERDAshallfileanupdatedplanforitsResidentialPoint-of-Salelightingprogram.25.NYSERDAshallfundanindependentevaluationconsultantandstatewideevaluationprotocoldevelopmentasdescribedinthebodyofthisorder.26.AsofJanuary1,2012,theutilityshareholderincentivemechanismapplicabletoprogramsauthorizedinthisorderisdiscontinued,asdescribedinthebodyofthisorder.27.TheSecretaryinhersolediscretionmayextendthedeadlinessetforthherein.28.Theseproceedingsarecontinued.BytheCommission,JACLYNA.BRILLINGSecretaryDigitallySignedbySecretaryNewYorkPublicServiceCommissionJaclynA.Brilling Appendix1:TableofProgramsAPPENDICESAppendix2:SurchargeCollectionScheduleAppendix3:2011ForecastsAppendix4:UtilityIncentiveProposalAppendix5:CommentsoftheParties APPENDIX 1 Table 1 Approved NYSERDA Electric Program Costs and Savings Targets Total %of 2012 2013 2014 2015 2016 2017 2018 2012-2018 Budaet NYSERDA Outreach & Education (Statewide)

Savings (MWh) 0 0 0 0 0 0 0 0 Program & Administrative Costs $5,598,000

$5,598,000

$5,598,000

$5,598,000

$0 $0 $0 $22,392,000 93.3% Evaluation/M&V Costs $300,000 $300,000 $300,000 $300,000 $0 $0 $0 $1,200,000 5.0% NYS Cost Recovery Fee $102,000 $102,000 $102,000 $102,000 $0 $0 $0 $408,000 1.7% Total $6,000,000

$6,000,000

$6,000,000

$6,000,000

$0 $0 $0 $24,000,000 General Awareness (DPS) Savings (MWh) 0 0 0 0 0 0 0 0 Program & Administrative Costs $3,281,122

$3,281,122 $3,281,122 $3,281,122

$0 $0 $0 $13,124,490 93.3% Evaluation/M&V Costs $175,837 $175,837

$175,837 $175,837 $0 $0 $0 $703,348 5.0% NYS Cost Recovery Fee $59,784 $59,784 $59,784 $59,784

$0 $0 $0 $239,136 1.7% Total $3,516,743

$3,516,743 $3,516,743 $3,516,743

$0 $0 $0 $14,066,974 Statewide Residential Point-of-Sa/e Program (R) Savings (MWh) 285,480 380,640 380,640 380,640 95,160 0 0 1,522,560 Program & Administrative Costs $4,965,399

$4,965,399 $4,965,399 $4,965,399

$0 $0 $0 $19,861,596 93.3% Evaluation/M&V Costs $266,098 $266,098 $266,098 $266,098 $0 $0 $0 $1,064,392 5.0% NYS Cost Recovery Fee $90,473 $90,473 $90,473 $90,473 $0 $0 $0 $361,892 1.7% Total $5,321,970

$5,321,970 $5,321,970 $5,321,970

$0 $0 $0 $21,287,880 APPENDIX 1 Total %of 2012 2013 2014 2015 2016 2017 2018 2012-2018 Budaet NYSERDA EmPowerNY (R-Ll) Savings (MWh) 18,449 20,900 20,900 20,900 2,451 0 0 83,600 Program & Administrative Costs $17,197,995 $17,197,995 $17,197,995 $17,197,995

$0 $0 $0 $68,791,978 93.3% Evaluation/M&V Costs $921,650 $921,650 $921,650

$921,650 $0 $0 $0 $3,686,600 5.0% NYS Cost Recovery Fee $313,361 $313,361 $313,361 $313,361 $0 $0 $0 $1,253,444 1.7% Total $18,433,006 $18,433,006 $18,433,006 $18,433,006

$0 $0 $0 $73,732,022 High Performance New Bui/dings/New Construction (C&I) Savings (MWh) 62,246 110,362 190,555 206,593 144,347 96,232 16,039 826,374 Program & Administrative Costs $33,418,670 $33,418,670 $33,418,670 $33,418,670

$0 $0 $0 $133,674,682 93.3% Evaluation/M&V Costs $1,790,925

$1,790,925 $1,790,925 $1,790,925

$0 $0 $0 $7,163,700 5.0% NYS Cost Recovery Fee $608,914 $608,914

$608,914 $608,914 $0 $0 $0 $2,435,656 1.7% Total $35,818,509 $35,818,509 $35,818,509 $35,818,509

$0 $0 $0 $143,274,038 Flex Tech/Technical Assistance (C&I) Savings (MWh) 117,185 172,835 189,530 189,530 72,345 16,695 0 758,120 Program & Administrative Costs $12,126,597

$12,126,597 $12,126,597 $12,126,597

$0 $0 $0 $48,506,389 93.3% Evaluation/M&V Costs $649,871 $649,871 $649,871 $649,871 $0 $0 $0 $2,599,484 5.0% NYS Cost Recovery Fee $220,956 $220,956 $220,956

$220,956 $0 $0 $0 $883,824 1.7% Total $12,997,424

$12,997,424 $12,997,424 $12,997,424

$0 $0 $0 $51,989,697 Flex Tech Industrial Process (C&I) Savings (MWh) 39,375 203,437 252,656 252,656 213,281 49,219 0 1,010,624 Program & Administrative Costs $33,096,726 $33,096,726 $33,096,726 $33,096,726

$0 $0 $0 $132,386,904 93.3% Evaluation/M&V Costs $1,773,672

$1,773,672 $1,773,672 $1,773,672

$0 $0 $0 $7,094,688 5.0% NYS Cost Recovery Fee $603,048 $603,048 $603,048 $603,048 $0 $0 $0 $2,412,192 1.7% Total $35,473,446 $35,473,446 $35,473,446 $35,473,446

$0 $0 $0 $141,893,784 APPENDIX 1 Total %of 2012 2013 2014 2015 2016 2017 2018 2012-2018 Budaet NYSERDA Electric Reduction in Master-Metered Multifamily Buildings (MF) Savings (MWh) 10,482 10,482 10,482 10,482 0 0 0 41,928 Program & Administrative Costs $4,917,215

$4,917,215 $4,917,215 $4,917,215

$0 $0 $0 $19,668,860 93.3% Evaluation/M&V Costs $263,516 $263,516 $263,516

$263,516 $0 $0 $0 $1,054,064 5.0% NYS Cost Recovery Fee $89,595 $89,595 $89,595 $89,595

$0 $0 $0 $358,380 1.7% Total $5,270,326

$5,270,326

$5,270,326

$5,270,326

$0 $0 $0 $21,081,304 Multifamily Building Performance (New & Existing) (MF) Savings (MWh) 28,428 28,428 28,428 28,428 0 0 0 113,712 Program & Administrative Costs $4,578,917 $4,578,917 $4,578,917 $4,578,917

$0 $0 $0 $18,315,667 93.3% Evaluation/M&V Costs $245,386 $245,386 $245,386

$245,386 $0 $0 $0 $981,544 5.0% NYS Cost Recovery Fee $83,431 $83,431 $83,431 $83,431

$0 $0 $0 $333,724 1.7% Total $4,907,734

$4,907,734

$4,907,734

$4,907,734

$0 $0 $0 $19,630,935 Low-Income Multifamily Building Performance (MF-Ll) Savings (MWh) 34,157 34,157 34,157 34,157 0 0 0 136,628 Program & Administrative Costs $8,387,179

$8,387,179 $8,387,179 $8,387,179

$0 $0 $0 $33,548,714 93.3% Evaluation/M&V Costs $449,473 $449,473 $449,473

$449,473 $0 $0 $0 $1,797,892 5.0% NYS Cost Recovery Fee $152,821 $152,821 $152,821 $152,821 $0 $0 $0 $611,284 1.7% Total $8,989,473

$8,989,473 $8,989,473 $8,989,473

$0 $0 $0 $35,957,890 Existing Facilities (C&I) Savings (MWh) 151,194 151,194 187,770 199,962 48,768 48,768 12,192 799,848 Program & Administrative Costs $26,248,974

$26,248,974

$30,784,071

$33,864,513 $7,615,539 $7,615,539

$3,080,443

$135,458,052 93.3% Evaluation/M&V Costs $1,406,697

$1,406,697 $1,649,735 $1,814,818

$408,121 $408,121 $165,082 $7,259,271 5.0% NYS Cost Recovery Fee $478,277 $478,277

$560,910 $617,038 $138,761 $138,761

$56,128 $2,468,152 1.7% Total $28,133,948 $28,133,948 $32,994,716 $36,296,369 $8,162,421 $8,162,421

$3,301,653

$145,185,475 APPENDIX 1 Total %of 2012 2013 2014 2015 2016 2017 2018 2012-2018 Budaet NYSERDA Benchmari<:ing and Operations Efficiency (C&I) Savings (MWh) 19,783 20,643 22,794 22,794 14,933 5,693 0 106,640 Program & Administrative Costs $4,397,199

$4,459,199 $4,935,259 $4,935,259

$538,062 $476,061 $0 $19,741,039 93.3% Evaluation/M&V Costs $235,648 $238,970 $264,483

$264,483 $28,834 $25,512 $0 $1,057,930 5.0% NYS Cost Recovery Fee $80,120 $81,250 $89,924 $89,924

$9,803 $8,674 $0 $359,695 1.7% Total $4,712,967

$4,779,419 $5,289,666 $5,289,666

$576,699 $510,247 $0 $21,158,664 Agricultural Component of Existing Facilities (Ag) Savings (MWh) 3,325 3,325 3,325 3,325 0 0 0 13,300 Program & Administrative Costs $2,799,000

$2,799,000

$2,799,000

$2,799,000

$0 $0 $0 $11,196,000 93.3% Evaluation/M&V Costs $150,000 $150,000 $150,000 $150,000 $0 $0 $0 $600,000 5.0% NYS Cost Recovery Fee $51,000 $51,000 $51,000 $51,000 $0 $0 $0 $204,000 1.7% Total $3,000,000

$3,000,000

$3,000,000

$3,000,000

$0 $0 $0 $12,000,000 Single Family Home Performance (R) Savings (MWh) 21,463 21,463 21,463 21,463 0 0 0 85,852 Program & Administrative Costs $6,562,244 $6,562,244 $6,562,244 $6,562,244

$0 $0 $0 $26,248,976 93.3% Evaluation/M&V Costs $351,674 $351,674

$351,674 $351,674 $0 $0 $0 $1,406,696 5.0% NYS Cost Recovery Fee $119,569 $119,569 $119,569

$119,569 $0 $0 $0 $478,276 1.7% Total $7,033,487 $7,033,487 $7,033,487 $7,033,487

$0 $0 $0 $28,133,948 Low-Income Single Family Home Performance (R-Ll) Savings (MWh) 4,706 4,706 4,706 4,706 0 0 0 18,824 Program & Administrative Costs $3,281,122

$3,281,122 $3,281,122 $3,281,122

$0 $0 $0 $13,124,490 93.3% Evaluation/M&V Costs $175,837 $175,837

$175,837 $175,837 $0 $0 $0 $703,348 5.0% NYS Cost Recovery Fee $59,784 $59,784 $59,784 $59,784

$0 $0 $0 $239,136 1.7% Total $3,516,743

$3,516,743 $3,516,743 $3,516,743

$0 $0 $0 $14,066,974 APPENDIX 1 Table 2 Approved Central Hudson Electric Program Costs and Savings Targets 2012 2013 2014 2015 2012-2015 Budaet Central Hudson Residential HVAC (R) Savings (MWh) 522 522 522 522 2,088 Program & Administrative Costs $805,084 $805,084 $805,084 $805,084 $3,220,336 95% Evaluation/M&

V Costs $42,372 $42,372 $42,372 $42,372

$169,488 5% Total $847,456 $847,456 $847,456 $847,456

$3,389,824 Small Business (C&I) Savings (MWh) 16,495 16,495 16,495 16,495 65,980 Program & Administrative Costs $4,273,284 $4,273,284

$4,273,284

$4,273,284

$17,093,136 95% Evaluation/M&

V Costs $224,909 $224,909 $224,909 $224,909 $899,636 5% Total $4,498,193 $4,498,193 $4,498,193

$4,498,193

$17,992,772 Mid-Size Commercial Business (C&I) Savings (MWh) 2,791 2,791 2,791 2,791 11,164 Program & Administrative Costs $1,157,035 $1,157,035 $1,157,035

$1,157,035

$4,628,140 95% Evaluation/M&

V Costs $60,896 $60,896 $60,896 $60,896

$243,584 5% Total $1,217,931 $1,217,931 $1,217,931 $1,217,931

$4,871,724 APPENDIX 1 Total %of 2012 2013 2014 2015 2012-2015 Budaet Central Hudson Residential Appliance Recycling (R) Savings (MWh) 2,226 2,226 2,226 2,226 8,904 Program & Administrative Costs $965,743 $965,743 $965,743 $965,743

$3,862,972 95% Evaluation/M&

V Costs $50,828 $50,828 $50,828 $50,828

$203,312 5% Total $1,016,571 $1,016,571 $1,016,571 $1,016,571

$4,066,284 Home Energy Reporting (R) Savings (MWh) 0 6,000 6,000 6,000 18,000 Program & Administrative Costs $0 $394,725 $394,725 $394,725

$1,184,175 95% Evaluation/M&

V Costs $0 $20,775 $20,775 $20,775 $62,325 5% Total $0 $415,500 $415,500 $415,500 $1,246,500 APPENDIX 1 Table 3 Approved Con Edison Electric Program Costs and Savings Targets Total %of 2012 2013 2014 2015 2012-2015 Budaet Con Edison Residential HVAC (R) Savings (MWh) 828 828 828 828 3,312 Program & Administrative Costs $3,844,330

$3,844,330 $3,844,330 $3,844,330

$15,377,320 95% Evaluation/M&V Costs $202,333 $202,333 $202,333 $202,333 $809,332 5% Total $4,046,663

$4,046,663 $4,046,663 $4,046,663

$16,186,652 Small Business (C&I) Savings (MWh) 69,238 69,238 69,238 69,238 276,952 Program & Administrative Costs $26,497,293 $26,497,293 $26,497,293 $26,497,293

$105,989,172 95% Evaluation/M&V Costs $1,394,594 $1,394,594 $1,394,594 $1,394,594 $5,578,376 5% Total $27,891,887

$27,891,887

$27,891,887

$27,891,887

$111,567,548 Refrigerator Replacement Plus (MF) Savings (MWh) 7,412 7,412 7,412 7,412 29,648 Program & Administrative Costs $7,004,639

$7,004,639

$7,004,639

$7,004,639

$28,018,556 95% Evaluation/M&V Costs $368,665 $368,665 $368,665 $368,665

$1,474,660 5% Total $7,373,304 $7,373,304 $7,373,304

$7,373,304

$29,493,216 Commercial and Industrial Equipment Rebate (C&I) Savings (MWh) 66,574 66,574 66,574 66,574 266,296 Program & Administrative Costs $35,605,995 $35,605,995 $35,605,995 $35,605,995

$142,423,980 95% Evaluation/M&V Costs $1,873,999

$1,873,999 $1,873,999 $1,873,999 $7,495,996 5% Total $37,479,994

$37,479,994

$37,479,994

$37,479,994

$149,919,976 APPENDIX 1 Total %of 2012 2013 2014 2015 2012-2015 Budaet Con Edison Commercial and Industrial Custom Efficiency (C&I) Savings (MWh) 9,131 9,131 9,131 9,131 36,524 Program & Administrative Costs $5,786,858

$5,786,858 $5,786,858 $5,786,858

$23,147,432 95% Evaluation/M&V Costs $304,571 $304,571 $304,571 $304,571 $1,218,284 5% Total $6,091,429

$6,091,429 $6,091,429 $6,091,429

$24,365,716 Appliance Bounty (R) Savings (MWh) 13,177 13,177 13,177 13,177 52,708 Program & Administrative Costs $4,318,293

$4,318,293 $4,318,293 $4,318,293

$17,273,172 95% Evaluation/M&V Costs $227,278 $227,278 $227,278 $227,278 $909,112 5% Total $4,545,571 $4,545,571 $4,545,571

$4,545,571

$18,182,284 Residential Direct Installation (R) Savings (MWh) 5,517 5,517 5,517 5,517 22,068 Program & Administrative Costs $2,862,215

$2,862,215 $2,862,215 $2,862,215

$11,448,860 95% Evaluation/M&V Costs $150,642 $150,642 $150,642 $150,642 $602,568 5% Total $3,012,857 $3,012,857 $3,012,857

$3,012,857

$12,051,428 Residential Room Air Conditioner (R) Savings (MWh) 1,442 1,442 1,442 1,442 5,768 Program & Administrative Costs $1,270,286

$1,270,286 $1,270,286 $1,270,286 $5,081,144 95% Evaluation/M&V Costs $66,857 $66,857 $66,857 $66,857

$267,428 5% Total $1,337,143

$1,337,143 $1,337,143 $1,337,143 $5,348,572 APPENDIX 1 Table 4 Approved NYSEG Electric Program Costs and Savings Targets Total %of 2012 2013 2014 2015 2012-2015 Budaet NYSEG Residential/Non-Residential Multifamily (MF) Savings (MWh) 165 165 165 165 660 Program & Administrative Costs $695,803 $695,803 $695,803 $695,803 $2,783,212 95% Evaluation/M&

V Costs $36,621 $36,621 $36,621 $36,621 $146,484 5% Total $732,424 $732,424

$732,424 $732,424 $2,929,696 Non-residential CommelCial and Industrial Prescriptive Rebate (C&I) Savings (MWh) 2,148 2,148 2,148 2,148 8,592 Program & Administrative Costs $1,239,758 $1,239,758 $1,239,758 $1,239,758

$4,959,032 95% Evaluation/M&

V Costs $65,250 $65,250 $65,250 $65,250 $261,000 5% Total $1,305,008

$1,305,008

$1,305,008

$1,305,008

$5,220,032 Non-residential Small Business Direct Installation (C&I) Savings (MWh) 31,676 31,676 31,676 31,676 126,704 Program & Administrative Costs $8,267,308

$8,267,308

$8,267,308

$8,267,308

$33,069,232 95% Evaluation/M&

V Costs $435,121 $435,121 $435,121 $435,121

$1,740,484 5% Total $8,702,429

$8,702,429

$8,702,429

$8,702,429

$34,809,716 Non-residential CommelCialAndustrial Custom Rebate (C&I) Savings (MWh) 8,934 8,934 8,934 8,934 35,736 Program & Administrative Costs $3,182,229 $3,182,229 $3,182,229 $3,182,229

$12,728,916 95% Evaluation/M&

V Costs $167,485 $167,485 $167,485 $167,485

$669,940 5% Total $3,349,714

$3,349,714

$3,349,714

$3,349,714

$13,398,856 APPENDIX 1 Total %of 2012 2013 2014 2015 2012-2015 Budaet NYSEG Block Bidding (C&I) Savings (MWh) 1,695 4,289 4,289 4,289 14,562 Program & Administrative Costs $624,150 $1,517,583 $1,517,583 $1,517,583 $5,176,899 95% Evaluation/M&

V Costs $32,850 $79,872 $79,872 $79,872 $272,466 5% Total $657,000 $1,597,455 $1,597,455 $1,597,455 $5,449,365 Refrigerator and Freezer Recycling (R) Savings (MWh) 0 4,361 4,361 4,361 13,083 Program & Administrative Costs $0 $1,281,000

$1,281,000

$1,281,000

$3,843,000 95% Evaluation/M&

V Costs $0 $67,421 $67,421 $67,421 $202,263 5% Total $0 $1,348,421 $1,348,421 $1,348,421

$4,045,263 APPENDIX 1 Table 5 Approved Niagara Mohawk Electric Program Coats and Savings Targets Total %of 2012 2013 2014 2015 2012-2015 Budaet Niagara Mohawk Small Business (C&I) Savings (MWh) 91,869 91,869 91,869 91,869 367,476 Program & Administrative Costs $23,380,154 $23,380,154 $23,380,154 $23,380,154

$93,520,616 95% Evaluation/M&V Costs $1,230,534

$1,230,534

$1,230,534 $1,230,534 $4,922,136 5% Total $24,610,688 $24,610,688 $24,610,688 $24,610,688

$98,442,752 Energy Wise (MF) Savings (MWh) 1,303 1,303 1,303 1,303 5,212 Program & Administrative Costs $964,579 $964,579 $964,579 $964,579

$3,858,316 95% Evaluation/M&V Costs $50,767 $50,767 $50,767 $50,767

$203,068 5% Total $1,015,346 $1,015,346 $1,015,346 $1,015,346

$4,061,384 Energy Initiative (Large Industrial)

Savings (MWh) 22,930 22,930 22,930 22,930 91,720 Program & Administrative Costs $6,249,397

$6,249,397

$6,249,397

$6,249,397

$24,997,588 95% Evaluation/M&V Costs $328,915 $328,915 $328,915 $328,915

$1,315,660 5% Total $6,578,312 $6,578,312 $6,578,312 $6,578,312

$26,313,248 Energy Initiativa (C&I) Savings (MWh) 93,908 93,908 93,908 93,908 375,632 Program & Administrative Costs $15,831,450 $15,831,450 $15,831,450 $15,831,450

$63,325,800 95% Evaluation/M&V Costs $833,234 $833,234 $833,234

$833,234 $3,332,936 5% Total $16,664,684 $16,664,684 $16,664,684 $16,664,684

$66,658,736 APPENDIX 1 Total %of 2012 2013 2014 2015 2012*2015 BudGet Niagara Mohawk Residential Building Practices and Demonstration (R) Savings (MWh) 0 14,580 14,580 14,580 43,740 Program & Administrative Costs $0 $749,421 $749,421 $749,421

$2,248,263 95% Evaluation/M&V Costs $0 $39,443 $39,443

$39,443 $118,329 5% Total $0 $788,864 $788,864

$788,864 $2,366,592 Residential Energy Star Products and Recycling (R) Savings (MWh) 13,399 0 0 0 13,399 Program & Administrative Costs $5,350,875

$0 $0 $0 $5,350,875 95% Evaluation/M&V Costs $281,625 $0 $0 $0 $281,625 5% Total $5,632,500

$0 $0 $0 $5,632,500 Enhanced Home Sealing Incentives (R) Savings (MWh) 4,390 0 0 0 4,390 Program & Administrative Costs $2,428,770

$0 $0 $0 $2,428,770 95% Evaluation/M&V Costs $127,830 $0 $0 $0 $127,830 5% Total $2,556,600

$0 $0 $0 $2,556,600

  • 12*

APPENDIX 1 Table 6 Approved O&R Electric Program Costs and Savings Targets Total %of 2012 2013 2014 2015 2012-2015 Budaet O&R Small Business (C&I) Savings (MWh) 12,489 12,489 12,489 12,489 49,956 Program & Administrative Costs $3,139,429

$3,139,429 $3,139,429 $3,139,429

$12,557,716 95% Evaluation/M&V Costs $165,233 $165,233 $165,233 $165,233

$660,932 5% Total $3,304,662

$3,304,662 $3,304,662 $3,304,662

$13,218,648 Commercial Existing Buildings (C&I) Savings (MWh) 5,088 5,088 5,088 5,088 20,352 Program & Administrative Costs $2,070,348

$2,070,348 $2,070,348 $2,070,348 $8,281,392 95% Evaluation/M&V Costs $108,965 $108,965 $108,965 $108,965

$435,860 5% Total $2,179,313

$2,179,313 $2,179,313 $2,179,313 $8,717,252 Residential Efficient Products (R) Savings (MWh) 0 2,243 2,243 2,243 6,729 Program & Administrative Costs $0 $777,280 $777,280 $777,280

$2,331,840 95% Evaluation/M&V Costs $0 $40,909 $40,909 $40,909 $122,727 5% Total $0 $818,189 $818,189 $818,189

$2,454,567 APPENDIX 1 Table 7 Approved RG&E Electric Program Costs and Savings Taroets Total %of 2012 2013 2014 2015 2012-2015 Budaet RG&E Residential/Non-Residential Multifamily (MF) Savings (MWh) 198 198 198 198 792 Program & Administrative Costs $615,952 $615,952 $615,952 $615,952

$2,463,808 95% Evaluation/M&

V Costs $32,418 $32,418 $32,418 $32,418 $129,672 5% Total $648,370 $648,370 $648,370 $648,370

$2,593,480 Non-residential CommelCial and Industrial Prescriptive Rebate (C&I) Savings (MWh) 1,459 1,459 1,459 1,459 5,836 Program & Administrative Costs $814,460 $814,460 $814,460 $814,460

$3,257,840 95% Evaluation/M&

V Costs $42,866 $42,866 $42,866 $42,866 $171,464 5% Total $857,326 $857,326 $857,326 $857,326

$3,429,304 Non-residential Small Business Direct Installation (C&I) Savings (MWh) 14,622 14,622 14,622 14,622 58,488 Program & Administrative Costs $3,766,750 $3,766,750 $3,766,750 $3,766,750

$15,067,000 95% Evaluation/M&

V Costs $198,250 $198,250 $198,250 $198,250

$793,000 5% Total $3,965,000

$3,965,000

$3,965,000

$3,965,000

$15,860,000 Non-residential CommelCialAndustrial Custom Rebate (C&I) Savings (MWh) 5,478 5,478 5,478 5,478 21,912 Program & Administrative Costs $2,015,086

$2,015,086

$2,015,086

$2,015,086

$8,060,344 95% Evaluation/M&

V Costs $106,057 $106,057 $106,057 $106,057 $424,228 5% Total $2,121,143 $2,121,143 $2,121,143 $2,121,143 $8,484,572 APPENDIX 1 Total %of 2012 2013 2014 2015 2012-2015 Budaet RG&E Block Bidding (C&I) Savings (MWh) 1,695 4,289 4,289 4,289 14,562 Program & Administrative Costs $572,850 $1,464,728 $1,464,728 $1,464,728 $4,967,034 95% Evaluation/M&

V Costs $30,150 $77,090 $77,090 $77,090 $261,420 5% Total $603,000 $1,541,818 $1,541,818 $1,541,818 $5,228,454 Refrigerator and Freezer Recycling (R) Savings (MWh) 0 4,361 4,361 4,361 13,083 Program & Administrative Costs $0 $1,281,000

$1,281,000

$1,281,000

$3,843,000 95% Evaluation/M&

V Costs $0 $67,421 $67,421 $67,421 $202,263 5% Total $0 $1,348,421 $1,348,421 $1,348,421

$4,045,263 APPENDIX 1 Table 8 Approved NYSERDA Gas Program Costs and Savings TaIPets Total %of 2012 2013 2014 2015 2016 2017 2018 2012-2018 Budaet NYSEROA Multifamily Perfonnance (MF) Savings (Oekatherms) 150,913 150,913 150,913 150,913 0 0 0 603,652 Program & Administrative Costs $7,539,267 $7,539,267 $7,539,267 $7,539,267

$0 $0 $0 $30,157,068 93.3% Evaluation/M&

V Costs $404,033 $404,033 $404,033 $404,033 $0 $0 $0 $1,616,132 5.0% NYS Cost Recovery Fee $137,371 $137,371 $137,371

$137,371 $0 $0 $0 $549,484 1.7% Total $8,080,671

$8,080,671

$8,080,671

$8,080,671

$0 $0 $0 $32,322,684 Low-Income Multifamily Perfonnance (MF-Ll) Savings (Oekatherms) 173,794 173,794 173,794 173,794 0 0 0 695,176 Program & Administrative Costs $12,701,780

$12,701,780

$12,701,780

$12,701,780

$0 $0 $0 $50,807,120 93.3% Evaluation/M&

V Costs $680,695 $680,695 $680,695 $680,695 $0 $0 $0 $2,722,780 5.0% NYS Cost Recovery Fee $231,436 $231,436 $231,436

$231,436 $0 $0 $0 $925,744 1.7% Total $13,613,911 $13,613,911 $13,613,911 $13,613,911

$0 $0 $0 $54,455,644 Industrial and Process Efficiency (Large Industrial)

Savings (Oekatherms) 912,740 912,740 912,740 912,740 0 0 0 3,650,960 Program & Administrative Costs $8,839,468 $8,839,468 $8,839,468 $8,839,468

$0 $0 $0 $35,357,872 93.3% Evaluation/M&

V Costs $473,712 $473,712 $473,712

$473,712 $0 $0 $0 $1,894,848 5.0% NYS Cost Recovery Fee $161,062 $161,062 $161,062 $161,062 $0 $0 $0 $644,248 1.7% Total $9,474,242 $9,474,242 $9,474,242 $9,474,242

$0 $0 $0 $37,896,968 APPENDIX 1 Total %of 2012 2013 2014 2015 2016 2017 2018 2012*2018 Budaet NYSERDA Existing Faci/ities (C&/) Savings (Dekatherms) 0 25,988 51,976 103,951 103,951 25,988 0 311,854 Program & Administrative Costs $0 $1,649,066 $1,884,645 $1,884,645

$1,884,645

$235,582 $0 $7,538,583 93.3% Evaluation/M&

V Costs $0 $88,374 $100,999 $100,999 $100,999 $12,624 $0 $403,995 5.0% NYS Cost Recovery Fee $0 $30,047 $34,339 $34,339

$34,339 $4,292 $0 $137,356 1.7% Total $0 $1,767,487 $2,019,983 $2,019,983

$2,019,983

$252,498 $0 $8,079,934 FlexTech (C&/) Savings (Dekatherms) 71,155 106,733 142,311 177,888 106,733 71,155 35,578 711,553 Program & Administrative Costs $415,206 $704,727 $801,233 $801,233 $386,028 $96,508 $0 $3,204,935 93.3% Evaluation/M&

V Costs $22,251 $37,766 $42,938 $42,938

$20,687 $5,171 $0 $171,751 5.0% NYS Cost Recovery Fee $7,565 $12,840 $14,599 $14,599

$7,033 $1,758 $0 $58,394 1.7% Total $445,022 $755,333 $858,770 $858,770 $413,748 $103,437 $0 $3,435,080 High Performance New Construction (C&/) Savings (Dekatherms) 0 0 43,041 66,217 82,772 96,015 43,041 331,086 Program & Administrative Costs $0 $0 $635,686 $1,148,027 $1,148,027

$1,148,027

$512,342 $4,592,109 93.3% Evaluation/M&

V Costs $0 $0 $34,066 $61,523 $61,523 $61,523 $27,456

$246,091 5.0% NYS Cost Recovery Fee $0 $0 $11,582 $20,917 $20,917 $20,917 $9,335 $83,668 1.7% Total $0 $0 $681,334 $1,230,467 $1,230,467

$1,230,467

$549,133 $4,921,868 Home Performance with Energy Star (R) Savings (Dekatherms) 229,608 229,608 229,608 229,608 0 0 0 918,432 Program & Administrative Costs $13,170,228 $13,170,228 $13,170,228 $13,170,228

$0 $0 $0 $52,680,912 93.3% Evaluation/M&

V Costs $705,799 $705,799 $705,799 $705,799 $0 $0 $0 $2,823,196 5.0% NYS Cost Recovery Fee $239,971 $239,971 $239,971

$239,971 $0 $0 $0 $959,884 1.7% Total $14,115,998 $14,115,998 $14,115,998 $14,115,998

$0 $0 $0 $56,463,992

  • 17*

APPENDIX 1 Total %of 2012 2013 2014 2015 2016 2017 2018 2012*2018 Budaet NYSERDA New York Energy Star Homes (New Construction) (R) Savings (Dekatherms) 245,010 245,010 245,010 245,010 0 0 0 980,040 Program & Administrative Costs $9,704,378 $9,704,378 $9,704,378 $9,704,378

$0 $0 $0 $38,817,512 93.3% Evaluation/M&

V Costs $520,063 $520,063 $520,063 $520,063 $0 $0 $0 $2,080,252 5.0% NYS Cost Recovery Fee $176,821 $176,821 $176,821

$176,821 $0 $0 $0 $707,284 1.7% Total $10,401,262

$10,401,262

$10,401,262

$10,401,262

$0 $0 $0 $41,605,048 Assisted Home Performance with Energy Star (R*LI) Savings (Dekatherms) 26,543 26,543 26,543 26,543 0 0 0 106,172 Program & Administrative Costs $3,856,055 $3,856,055 $3,856,055 $3,856,055

$0 $0 $0 $15,424,220 93.3% Evaluation/M&

V Costs $206,648 $206,648 $206,648

$206,648 $0 $0 $0 $826,592 5.0% NYS Cost Recovery Fee $70,260 $70,260 $70,260 $70,260 $0 $0 $0 $281,040 1.7% Total $4,132,963 $4,132,963 $4,132,963 $4,132,963

$0 $0 $0 $16,531,852 EmPower New York (R*LI) Savings (Dekatherms) 118,391 118,391 118,391 118,391 0 0 0 473,562 Program & Administrative Costs $12,710,316 $12,710,316 $12,710,316 $12,710,316

$0 $0 $0 $50,841,264 93.3% Evaluation/M&

V Costs $681,153 $681,153 $681,153

$681,153 $0 $0 $0 $2,724,612 5.0% NYS Cost Recovery Fee $231,592 $231,592 $231,592

$231,592 $0 $0 $0 $926,368 1.7% Total $13,623,061 $13,623,061 $13,623,061 $13,623,061

$0 $0 $0 $54,492,244 Agriculture Energy Efficiency (Ag) Savings (Dekatherms) 3,630 3,630 3,630 3,630 0 0 0 14,520 Program & Administrative Costs $310,998 $310,998 $310,998

$310,998 $0 $0 $0 $1,243,992 93.3% Evaluation/M&

V Costs $16,666 $16,666 $16,666 $16,666

$0 $0 $0 $66,664 5.0% NYS Cost Recovery Fee $5,666 $5,666 $5,666 $5,666

$0 $0 $0 $22,664 1.7% Total $333,330 $333,330 $333,330

$333,330 $0 $0 $0 $1,333,320

  • 18*

APPENDIX 1 Total %of 2012 2013 2014 2015 2016 2017 2018 2012*2018 Budllet NYSEROA Low-Income Single Family Home Performance (R*LI) Savings (Oekatherms) 38,679 38,679 38,679 38,679 0 0 0 154,716 Program & Administrative Costs $5,796,649 $5,796,649 $5,796,649 $5,796,649

$0 $0 $0 $23,186,596 93.3% Evaluation/M&

V Costs $310,645 $310,645 $310,645

$310,645 $0 $0 $0 $1,242,580 5.0% NYS Cost Recovery Fee $105,619 $105,619 $105,619

$105,619 $0 $0 $0 $422,476 1.7% Total $6,212,913 $6,212,913 $6,212,913 $6,212,913

$0 $0 $0 $24,851,652 Table 9 NYSERDA Approved Supplemental Gas Program Costs and Savings Targets Total %of 2012 2013 2014 2015 2016 2017 2018 2012*2018 Budllet NYSEROA EmPower New Yo/1( (R*LI) Savings (Oekatherms) 94,212 94,212 94,212 94,212 0 0 0 376,846 Program & Administrative Costs $10,114,467

$10,114,467 $10,114,467 $10,114,467

$0 $0 $0 $40,457,868 93.3% Evaluation/M&V Costs $542,040 $542,040 $542,040 $542,040 $0 $0 $0 $2,168,160 5.0% NYS Cost Recovery Fee $184,293 $184,293 $184,293 $184,293

$0 $0 $0 $737,172 1.7% Total $10,840,800

$10,840,800

$10,840,800

$10,840,800

$0 $0 $0 $43,363,200

  • 19*

APPENDIX 1 Table 10 Approved Central Hudson Gas Program Costs and Savinos Taroets Total %of 2012 2013 2014 2015 2012-2015 Budaet Central Hudson Residential HVAC (R) Savings (Oekatherms) 15,097 15,097 15,097 15,097 60,388 Program & Administrative Costs $361,688 $361,688 $361,688 $361,688

$1,446,752 95% Evaluation/M&V Costs $19,036 $19,036 $19,036 $19,036 $76,144 5% Total $380,724 $380,724 $380,724 $380,724 $1,522,896 Small & Mid-size Commercial Gas Efficiency (C&I) Savings (Oekatherms) 2,199 2,199 2,199 2,199 8,796 Program & Administrative Costs $149,055 $149,055 $149,055 $149,055 $596,220 95% Evaluation/M&V Costs $7,845 $7,845

$7,845 $7,845 $31,380 5% Total $156,900 $156,900 $156,900 $156,900 $627,600 Home Energy Reporting (R) Savings (Oekatherms) 0 10,000 10,000 10,000 30,000 Program & Administrative Costs $0 $131,575 $131,575 $131,575 $394,725 95% Evaluation/M&V Costs $0 $6,925 $6,925 $6,925 $20,775 5% Total $0 $138,500 $138,500 $138,500 $415,500 APPENDIX 1 Table 11 Approved Con Edison Gas Program Costs and Savings Taroets Total %of 2012 2013 2014 2015 2012-2015 Budaet Con Edison Residential HVAC (R) Savings (Oekatherms) 37,242 37,242 37,242 37,242 148,968 Program & Administrative Costs $2,662,286 $2,662,286 $2,662,286 $2,662,286

$10,649,144 95% Evaluation/M&V Costs $140,120 $140,120 $140,120 $140,120 $560,480 5% Total $2,802,406 $2,802,406 $2,802,406 $2,802,406

$11,209,624 Multifamily Low Income (MF-Ll) Savings (Oekatherms) 15,702 15,702 15,702 15,702 62,808 Program & Administrative Costs $1,127,840 $1,127,840 $1,127,840 $1,127,840 $4,511,360 95% Evaluation/M&V Costs $59,360 $59,360 $59,360 $59,360

$237,440 5% Total $1,187,200 $1,187,200 $1,187,200 $1,187,200 $4,748,800 Refrigerator Replacement Plus (MF) Savings (Oekatherms) 132,210 132,210 132,210 132,210 528,840 Program & Administrative Costs $5,687,042 $5,687,042 $5,687,042 $5,687,042

$22,748,168 95% Evaluation/M&V Costs $299,317 $299,317 $299,317 $299,317

$1,197,268 5% Total $5,986,359 $5,986,359 $5,986,359 $5,986,359

$23,945,436 Commercial Gas Efficient Equipment Replacement (C&I) Savings (Oekatherms) 55,381 55,381 55,381 55,381 221,524 Program & Administrative Costs $3,037,625 $3,037,625 $3,037,625 $3,037,625

$12,150,500 95% Evaluation/M&V Costs $159,875 $159,875 $159,875 $159,875

$639,500 5% Total $3,197,500 $3,197,500 $3,197,500 $3,197,500

$12,790,000 APPENDIX 1 Total %of 2012 2013 2014 2015 2012-2015 Budaet Con Edison Commercial and Industrial Custom Gas Efficiency (C&I) Savings (Oekatherms) 36,839 36,839 36,839 36,839 147,356 Program & Administrative Costs $1,653,862 $1,653,862 $1,653,862 $1,653,862 $6,615,448 95% Evaluation/M&V Costs $87,045 $87,045 $87,045 $87,045

$348,180 5% Total $1,740,907

$1,740,907

$1,740,907

$1,740,907

$6,963,628 Table 12 Approved Coming Gas Program Costs and Savings Targets Total %of 2012 2013 2014 2015 2012-2015 Budaet Corning Residential HVAC (R) Savings (Oekatherms) 11,012 11,012 11,012 11,012 44,048 Program & Administrative Costs $165,482 $165,482 $165,482 $165,482

$661,928 95% Evaluation/M&V Costs $8,709 $8,709 $8,709 $8,709

$34,836 5% Total $174,191 $174,191 $174,191 $174,191 $696,764 Small Commercial HVAC (C&I) Savings (Oekatherms) 5,601 5,601 5,601 5,601 22,404 Program & Administrative Costs $110,025 $110,025 $110,025 $110,025 $440,100 95% Evaluation/M&V Costs $5,790 $5,790 $5,790 $5,790

$23,160 5% Total $115,815 $115,815 $115,815 $115,815 $463,260 APPENDIX 1 Table 13 Approved NYSEG Gas Program Costs and Savings Taroets Total %of 2012 2013 2014 2015 2012*2015 Budllet NYSEG Residential HVAC (R) Savings (Oekatherms) 103,530 103,530 103,530 103,530 414,120 Program & Administrative Costs $779,113 $779,113 $779,113 $779,113

$3,116,452 95% EvaluationlM&V Costs $41,005 $41,005 $41,005 $41,005 $164,020 5% Total $820,118 $820,118 $820,118 $820,118

$3,280,472 Non*residential Commercial and Industrial Prescriptive Rebate (C&I) Savings (Oekatherms) 6,531 6,531 6,531 6,531 26,124 Program & Administrative Costs $291,754 $291,754 $291,754 $291,754

$1,167,016 95% EvaluationlM&V Costs $15,355 $15,355 $15,355 $15,355 $61,420 5% Total $307,109 $307,109 $307,109 $307,109 $1,228,436 Non*residential Commercial/lndustrial Custom Rebate (C&I) Savings (Oekatherms) 7,045 7,045 7,045 7,045 28,180 Program & Administrative Costs $299,691 $299,691 $299,691 $299,691

$1,198,764 95% EvaluationlM&V Costs $15,773 $15,773 $15,773 $15,773 $63,092 5% Total $315,464 $315,464 $315,464 $315,464

$1,261,856

  • 23*

APPENDIX 1 Table 14 Ap'p'rovad Niagara Mohawk Gas Program Costs and Savings Tamets Total %of 2012 2013 2014 2015 2012*2015 Budaet Niagara Mohawk Residential HVAC (R) Savings (Oekatherms) 211,968 211,968 211,968 211,968 847,872 Program & Administrative Costs $4,141,708 $4,141,708 $4,141,708 $4,141,708

$16,566,832 95% Evaluation/M&V Costs $217,984 $217,984 $217,984

$217,984 $871,936 5% Total $4,359,692 $4,359,692 $4,359,692 $4,359,692

$17,438,768 Energy Wise (MF) Savings (Oekatherms) 15,876 15,876 15,876 15,876 63,504 Program & Administrative Costs $1,027,828 $1,027,828 $1,027,828 $1,027,828

$4,111,312 95% Evaluation/M&V Costs $54,096 $54,096 $54,096

$54,096 $216,384 5% Total $1,081,924 $1,081,924 $1,081,924 $1,081,924 $4,327,696 Energy Initiative/Commercial High*Efficiency Heating and Water Heating (C&I) Savings (Oekatherms) 84,603 84,603 84,603 84,603 338,412 Program & Administrative Costs $3,030,408

$3,030,408

$3,030,408

$3,030,408

$12,121,632 95% Evaluation/M&V Costs $159,495 $159,495 $159,495 $159,495 $637,980 5% Total $3,189,903 $3,189,903 $3,189,903 $3,189,903

$12,759,612 Enhanced Home Sealing Incentives (R) Savings (Oekatherms) 16,563 16,563 16,563 16,563 66,252 Program & Administrative Costs $983,715 $983,715 $983,715 $983,715

$3,934,860 95% Evaluation/M&V Costs $51,774 $51,774 $51,774 $51,774

$207,096 5% Total $1,035,489 $1,035,489 $1,035,489 $1,035,489

$4,141,956 APPENDIX 1 Total %of 2012 2013 2014 2015 2012*2015 Budaet Niagara Mohawk Residential Building Practices and Demonstration (R) Savings (Oekatherms) 0 116,478 116,478 116,478 349,434 Program & Administrative Costs $0 $716,306 $716,306 $716,306 $2,148,918 95% Evaluation/M&V Costs $0 $37,700 $37,700 $37,700 $113,100 5% Total $0 $754,006 $754,006 $754,006 $2,262,018 Residential Energy Star Products (R) Savings (Oekatherms) 1,007 1,007 1,007 1,007 4,028 Program & Administrative Costs $121,836 $121,836 $121,836 $121,836 $487,344 95% Evaluation/M&V Costs $6,412 $6,412 $6,412

$6,412 $25,648 5% Total $128,248 $128,248 $128,248 $128,248 $512,992 Table 15 Approved O&R Gas Program Costs and Savinas Taroets Total %of 2012 2013 2014 2015 2012*2015 Budaet O&R Residential HVAC (R) Savings (Oekatherms) 14,691 14,691 14,691 14,691 58,764 Program & Administrative Costs $510,099 $510,099 $510,099 $510,099 $2,040,396 95% Evaluation/M&V Costs $26,847 $26,847 $26,847 $26,847

$107,388 5% Total $536,946 $536,946 $536,946 $536,946

$2,147,784

  • 25*

APPENDIX 1 Table 16 Approved RG&E Gas Program Costs and Savings Taroets Total %of 2012 2013 2014 2015 2012-2015 Budaet RG&E Residential HVAC (R) Savings (Oekatherms) 247,987 247,987 247,987 247,987 991,948 Program & Administrative Costs $4,362,389 $4,362,389 $4,362,389 $4,362,389

$17,449,556 95% Evaluation/M&V Costs $229,599 $229,599 $229,599 $229,599 $918,396 5% Total $4,591,988 $4,591,988 $4,591,988 $4,591,988

$18,367,952 Non-residential Commercial and Industrial Prescriptive Rebate (C&I) Savings (Oekatherms) 6,736 6,736 6,736 6,736 26,944 Program & Administrative Costs $287,857 $287,857 $287,857 $287,857

$1,151,428 95% Evaluation/M&V Costs $15,150 $15,150 $15,150 $15,150 $60,600 5% Total $303,007 $303,007 $303,007 $303,007

$1,212,028 Non-residential Commercial/lndustrial Custom Rebate (C&I) Savings (Oekatherms) 6,885 6,885 6,885 6,885 27,540 Program & Administrative Costs $300,255 $300,255 $300,255 $300,255

$1,201,020 95% Evaluation/M&V Costs $15,802 $15,802 $15,802 $15,802 $63,208 5% Total $316,057 $316,057 $316,057 $316,057

$1,264,228 APPENDIX 1 Table 17 Approved KEDLI Gas Program Costs and Savings Taraets Total %of 2012 2013 2014 2015 2012-2015 Budget KEDLI Residential HVAC (R) Savings (Oekatherms) 33,647 33,647 33,647 33,647 134,588 Program & Administrative Costs $1,998,259 $1,998,259 $1,998,259

$1,998,259

$7,993,036 95% Evaluation/M&V Costs $105,171 $105,171 $105,171

$105,171 $420,684 5% Total $2,103,430 $2,103,430 $2,103,430

$2,103,430

$8,413,720 Multifamily (MF) Savings (Oekatherms) 9,900 9,900 9,900 9,900 39,600 Program & Administrative Costs $414,068 $414,068 $414,068 $414,068

$1,656,272 95% Evaluation/M&V Costs $21,793 $21,793

$21,793 $21,793 $87,172 5% Total $435,861 $435,861 $435,861

$435,861 $1,743,444 Commercial, Industrial and Multi Family Energy Efficiency (Large Industrial)

Savings (Oekatherms) 40,500 40,500 40,500 40,500 162,000 Program & Administrative Costs $1,611,816 $1,611,816 $1,611,816 $1,611,816 $6,447,264 95% Evaluation/M&V Costs $84,832 $84,832

$84,832 $84,832 $339,328 5% Total $1,696,648 $1,696,648 $1,696,648

$1,696,648

$6,786,592 APPENDIX 1 Total %of 2012 2013 2014 2015 2012-2015 Budaet KEDLI Commercial Component of C&I and Multi Family Energy EffICiency (C&I) Savings (Oekatherms) 41,914 41,914 41,914 41,914 167,656 Program & Administrative Costs $857,494 $857,494

$857,494 $857,494 $3,429,976 95% Evaluation/M&V Costs $45,131 $45,131 $45,131 $45,131

$180,524 5% Total $902,625 $902,625 $902,625 $902,625

$3,610,500 Enhanced Home Sealing Incentives (R) Savings (Oekatherms) 21,786 21,786 21,786 21,786 87,144 Program & Administrative Costs $1,850,000

$1,850,000

$1,850,000

$1,850,000

$7,400,000 95% Evaluation/M&V Costs $97,368 $97,368

$97,368 $97,368 $389,472 5% Total $1,947,368 $1,947,368 $1,947,368

$1,947,368

$7,789,472 Residential Energy Star Products (R) Savings (Oekatherms) 476 476 476 476 1,904 Program & Administrative Costs $74,338 $74,338

$74,338 $74,338 $297,352 95% Evaluation/M&V Costs $3,912 $3,912

$3,912 $3,912 $15,648 5% Total $78,250 $78,250

$78,250 $78,250 $313,000 APPENDIX 1 Table 18 Approved KEDNY Gas Program Costs and Savings Taroets Total %of 2012 2013 2014 2015 2012-2015 Budaet KEDNY Residential HVAC (R) Savings (Dekatherms) 36,998 36,998 36,998 36,998 147,992 Program & Administrative Costs $2,167,088 $2,167,088 $2,167,088 $2,167,088

$8,668,352 95% Evaluation/M&V Costs $114,057 $114,057 $114,057 $114,057 $456,228 5% Total $2,281,145 $2,281,145 $2,281,145 $2,281,145

$9,124,580 Multifamily (MF) Savings (Dekatherms) 58,175 58,175 58,175 58,175 232,700 Program & Administrative Costs $2,712,892 $2,712,892 $2,712,892 $2,712,892

$10,851,568 95% Evaluation/M&V Costs $142,783 $142,783 $142,783 $142,783 $571,132 5% Total $2,855,675 $2,855,675 $2,855,675 $2,855,675

$11,422,700 Commercial, Industrial and Multi Family Energy Efficiency (Large IndustriaQ Savings (Dekatherms) 78,300 78,300 78,300 78,300 313,200 Program & Administrative Costs $3,395,084 $3,395,084 $3,395,084

$3,395,084

$13,580,336 95% Evaluation/M&V Costs $178,688 $178,688 $178,688 $178,688 $714,752 5% Total $3,573,772 $3,573,772 $3,573,772 $3,573,772

$14,295,088 APPENDIX 1 Total %of 2012 2013 2014 2015 2012-2015 Budaet KEDNY Commercial Component of C&I and Multi Family Energy Efficiency (C&I) Savings (Oekatherms) 51,401 51,401 51,401 51,401 205,604 Program & Administrative Costs $1,994,188 $1,994,188 $1,994,188 $1,994,188

$7,976,752 95% Evaluation/M&V Costs $104,957 $104,957 $104,957 $104,957 $419,828 5% Total $2,099,145

$2,099,145

$2,099,145

$2,099,145

$8,396,580 Enhanced Home Sealing Incentives (R) Savings (Oekatherms) 27,200 27,200 27,200 27,200 108,800 Program & Administrative Costs $1,788,971 $1,788,971 $1,788,971 $1,788,971

$7,155,884 95% Evaluation/M&V Costs $94,156 $94,156 $94,156

$94,156 $376,624 5% Total $1,883,127 $1,883,127 $1,883,127

$1,883,127

$7,532,508 Residential Energy Star Products (R) Savings (Oekatherms) 392 392 392 392 1,568 Program & Administrative Costs $74,338 $74,338 $74,338

$74,338 $297,352 95% Evaluation/M&V Costs $3,912 $3,912 $3,912

$3,912 $15,648 5% Total $78,250 $78,250 $78,250 $78,250 $313,000 APPENDIX 1 Table 19 Approved NFG Gas Program Costs and Savings Targets Total %of 2012 2013 2014 2015 2012-2015 Budaet NFG Low Income Usage Reduction Program (R-Ll) Savings (Dekatherrns) TBD TBD TBD TBD TBD Program & Administrative Costs $3,860,496 $3,860,496 $3,860,496

$3,860,496

$15,441,984 95% Evaluation/M&

V Costs $203,184 $203,184 $203,184 $203,184 $812,736 5% Total $4,063,680 $4,063,680 $4,063,680

$4,063,680

$16,254,720 Residential Rebate (R) Savings (Dekatherrns) TBD TBD TBD TBD TBD Program & Administrative Costs $3,860,496 $3,860,496 $3,860,496

$3,860,496

$15,441,984 95% Evaluation/M&

V Costs $203,184 $203,184 $203,184 $203,184 $812,736 5% Total $4,063,680 $4,063,680 $4,063,680

$4,063,680

$16,254,720 Small Non-Residential Rebate Program (C&I) Savings (Dekatherrns) TBD TBD TBD TBD TBD Program & Administrative Costs $1,817,008 $1,817,008 $1,817,008 $1,817,008 $7,268,032 95% Evaluation/M&

V Costs $95,632 $95,632 $95,632 $95,632

$382,528 5% Total $1,912,640 $1,912,640 $1,912,640 $1,912,640 $7,650,560 APPENDIX 1 Table 20 Approved St. Lawrence Gas Program Costs and Savings Targets Total %of 2012 2013 2014 2015 2012-2015 Budaet St. Lawrence Residential HVAC (R) Savings (Dekatherms) 3,243 3,243 3,243 3,243 12,972 Program & Administrative Costs $68,090 $68,090 $68,090 $68,090 $272,360 95% Evaluation/M&V Costs $3,583 $3,583 $3,583 $3,583

$14,332 5% Total $71,673 $71,673 $71,673 $71,673 $286,692 Small Commercial HVAC (C&I) Savings (Dekatherms) 10,122 10,122 10,122 10,122 40,488 Program & Administrative Costs $220,050 $220,050 $220,050 $220,050 $880,200 95% Evaluation/M&V Costs $11,581 $11,581 $11,581 $11,581

$46,324 5% Total $231,631 $231,631 $231,631 $231,631 $926,524 Central Hudson Con Edison NYSEG Niagara Mohawk O&R RG&E TOTAL NYSERDA Central Hudson Con Edison NYSEG Niagara Mohawk O&R RG&E TOTAL NYSERDA APPENDIX 2 Tabla 1 Utility Electric Program Budget Totals and Collections 2012 2013 2014 2015 2016 2017 2018 2012-2018

$7,580,151 $7,995,651 $7,995,651 $7,995,651

$0 $0 $0 $31,567,104 $91,778,848 $91,778,848 $91,778,848 $91,778,848

$0 $0 $0 $367,115,392

$14,746,575

$17,035,451

$17,035,451

$17,035,451

$0 $0 $0 $65,852,928

$57,058,130 $49,657,894 $49,657,894 $49,657,894

$0 $0 $0 $206,031,812

$5,483,975

$6,302,164

$6,302,164

$6,302,164

$0 $0 $0 $24,390,467

$8194839 1;10482078 1;10482078 1;10482078 1;39641 073 $184,842,518

$183,252,086

$183,252,086

$183,252,086

$0 $0 $0 $734,598,776 Tabla 2 NYSERDA Electric ProW8m Budget Tofllls 2012 $183,125,776 2013 $183,192,228 2014 $188,563,243 2015 $191,864,896 2018 2017 2018 2012-2018

$8,739,120

$8,672,668

$3,301,653

$767,459,584 Tabl1l3 NYSERDA Electric Progl8m Collecl/ons and T1ansfers to NYSERDA 2012 2013 2014 2015 2018 2017 2018 2012-2018

$0 $3,244,351

$11,030,795

$11,882,437

$8,840,858

$4,704,310

$5,083,211

$44,765,961 5,833% $0 $20,463,703

$69,576,590

$74,948,312

$55,763,591 $29,672,369 $31,936,133

$282,360,699 36.792% $0 $7,836,270

$26,643,319

$28,700,340 $21,353,836 $11,362,592 $12,229,467

$106,125,824 14.089% $0 $17,895,221

$60,843,750 $65,541,245 $48,784,476

$25,948,070

$27,927,699

$246,920,461 32.174% $0 $2,399,634

$8,158,755

$8,766,658

$6,539,002 $3,479,469 $3,744,924

$33,110,442 4.314% M 7al li12 SlD D27 9Dl lilj2 17§ 6.799% $0 $55,620,577

$189,109,962

$203,710,363

$151,566,072

$80,649,837

$86,802,773

$767,459,584 100.000%

APPENDIX 2 Tabla 4 Total All Electric Collections 2012 2013 2014 2015 2016 2017 2018 2012-2018 Central Hudson $7,580,151

$11,240,002 $19,026,446 $19,878,088

$8,840,858

$4,704,310

$5,063,211

$76,333,065 Con Edison $91,778,848

$112,242,551 $161,355,438 $166,727,160

$55,763,591 $29,672,369 $31,936,133

$649,476,091 NYSEG $14,746,575

$24,871,721

$43,678,770

$45,735,791 $21,353,836 $11,362,592

$12,229,467

$173,978,752 Niagara Mohawk $57,058,130

$67,553,115

$110,501,644

$115,199,139

$48,784,476

$25,948,070

$27,927,699

$452,952,273 O&R $5,483,975 $8,701,798

$14,460,919

$15,090,822

$6,539,002

$3,479,469

$3,744,924

$57,500,909 RG&E 194 839 263 476 338 831 331 448 &10304 310 483 027 901 338 817270 TOTAL $184,842,518 $238,872,663

$372,362,048 $386,962,449 $151,566,072

$80,649,837

$86,802,773

$1,502,058,360 Tabla 5 U11111v Gas Program Budget Totals and Collections 2012 2013 2014 2015 2018 2017 2018 2012-2018 Central Hudson $537,624 $676,124

$676,124 $676,124 $0 $0 $0 $2,565,996 Con Edison $14,914,372 $14,914,372 $14,914,372 $14,914,372

$0 $0 $0 $59,657,488 Coming $290,006 $290,006 $290,006 $290,006 $0 $0 $0 $1,160,024 NYSEG $1,442,691

$1,442,691 $1,442,691 $1,442,691

$0 $0 $0 $5,770,764 Niagara Mohawk $9,795,256 $10,549,262 $10,549,262 $10,549,262

$0 $0 $0 $41,443,042 O&R $536,946 $536,946 $536,946 $536,946

$0 $0 $0 $2,147,784 RG&E $5,211,052 $5,211,052 $5,211,052 $5,211,052

$0 $0 $0 $20,844,208 KEDU $7,164,182 $7,164,182 $7,164,182 $7,164,182

$0 $0 $0 $28,656,728 KEDNY $12,771,114 $12,771,114 $12,771,114

$12,771,114

$0 $0 $0 $51,084,456 NFG $10,040,000

$10,040,000

$10,040,000

$10,040,000

$0 $0 $0 $40,160,000 St. Lawrence $303304 $303304 $303304 304 ill ill ill 213216 TOTAL $63,006,547 $63,899,053 $63,899,053 $63,899,053

$0 $0 $0 $254,703,706 NYSERDA Central Hudson Con Edison NYSEG Niagara Mohawk O&R RG&E KEDU KEDNY NFG TOTAL NYSERDA 2012 $80,433,373 2012 $0 $0 $0 $0 $0 $0 $0

$0 $0 APPENDIX 2 TableS NYSERDA Gas Program Budget Total5 Excluding Supplemental Low Income 2018 2012-2018 2013 $82,511,171 2014 $83,548,438 2015 $84,097,571 201S $3,664,198 2017 $1,586,402

$549,133 $336,390,286 Table 7 NYSERDA Gas Program Collect/ana and Tnlnafe", to NYSERDA 2013 2014 2015 2018 2017 2018 2012-2018

$453,262 $1,541,092

$1,660,073

$1,235,140

$657,230 $707,372 $6,254,168 1.86% $6,298,107 $21,413,564 $23,066,817 $17,162,342 $9,132,255 $9,828,973

$86,902,057 25.83% $1,537,903 $5,228,869 $5,632,569

$4,190,785

$2,229,959

$2,400,087

$21,220,172 6.31% $2,888,864 $9,822,138

$10,580,465

$7,872,155

$4,188,853

$4,508,429

$39,860,903 11.85% $688,402 $2,340,566

$2,521,271

$1,875,895

$998,183 $1,074,336

$9,498,653 2.82% $1,474,833

$5,014,433

$5,401,577

$4,018,920

$2,138,508

$2,301,659

$20,349,930 6.05% $3,405,318

$11,578,081

$12,471,976

$9,279,491

$4,937,711

$5,314,419

$46,986,995 13.97% $5,071,188

$17,242,040

$18,573,227

$13,818,988

$7,353,223

$7,914,215

$69,972,880 20.80% 561 546 709 256 381 662 980 213 714242 997 609 344 527 10.51% $24,379,423

$82,890,038 $89,289,637 $66,433,928

$35,350,163

$38,047,097

$336,390,286 100.00%

Central Hudson Con Edison Coming NYSEG Niagara Mohawk O&R RG&E KEDLI KEDNY NFG 81. Lawrence TOTAL NYSERDA Tabla 8 Total All Gas Collaclions 2012 2013 2014 2015 2016 2017 2018 $537,624 $1,129,386 $2,217,216

$2,336,197

$1,235,140 $657,230 $707,372 $14,914,372 $21,212,479 $36,327,936 $37,981,189 $17,162,342 $9,132,255 $9,828,973

$290,006 $290,006 $290,006 $290,006 $0 $0 $0 $1,442,691 $2,980,594 $6,671,560

$7,075,260 $4,190,785 $2,229,959

$2,400,087

$9,795,256

$13,438,126

$20,371,400

$21,129,727 $7,872,155 $4,188,853 $4,508,429

$536,946 $1,225,348 $2,877,512

$3,058,217

$1,875,895

$998,183 $1,074,336 $5,211,052 $6,685,885 $10,225,485 $10,612,629

$4,018,920 $2,138,508 $2,301,659

$7,164,182

$10,569,500 $18,742,263 $19,636,158 $9,279,491 $4,937,711

$5,314,419

$12,771,114

$17,842,302

$30,013,154

$31,344,341

$13,818,988 $7,353,223 $7,914,215

$10,040,000 $12,601,546 $18,749,256 $19,421,662 $6,980,213 $3,714,242 $3,997,609 ag4 ag4 5aga aIM saga ag4 $63,006,547

$88,278,476

$146,789,091

$153,188,690 $66,433,928 $35,350,163

$38,047,097 Tabla 9 NYSERDA Supplemental Low Income Gas Program Budget Not Included in Collections or Transfers to NVSERDA 2012 $10,840,800 2013 $10,840,800 2014 $10,840,800 2015 $10,840,800 2016 $0 2017 $0 2018 $0 2012*2018

$8,820,164

$146,559,545

$1,160,024

$26,990,936

$81,303,945

$11,646,437

$41,194,138

$75,643,723

$121,057,336

$75,504,527

$1 21a 216 $591,093,992 2012*2018

$43,363,200 APPENDIX 2 APPENDIX32011ELECTRICSAVINGSFORECAST PA2011NetAnnual MWhForecastAdjusted2011NetAnnualMWhTarget(perTechManualII)ForecastasaPercentofTargetCentralHudson47,67828,034170.1%ConEdison174,621161,956107.8%NiagaraMohawk311,877214,455145.4%NYSEG58,20763,81891.2%O&R15,92619,20482.9%RG&E44,12641,610106.0%NYSERDA558,010876,85563.6%TOTAL1,210,4451,405,93286.1%2011GASSAVINGSFORECAST PA2011DthForecastAdjusted2011NetAnnualDthTarget(perTechManual II)ForecastasaPercentofTargetCentralHudson24,06727,29688.2%ConEdison260,011277,37493.7%Corning6,57616,07340.9%KED-LI161,875148,223109.2%KED-NY294,308252,466116.6%NiagaraMohawk429,777408,479105.2%NYSEG87,202188,39546.3%O&R7,67314,69152.2%RG&E190,627332,89757.3%St.Lawrence6,19713,36546.4%NYSERDA987,9561,936,87551.0%TOTAL2,456,2693,616,13567.9%

APPENDIX4EEPS-ProposalforUtilityShareholderIncentivesIncentivesProposal1)Atotalincentivepoolwillbecalculatedbasedonestimatesofa5-basis-pointequivalentoverthefour-yearperiod.2)Theincentivepoolwillbedividedintotwosums(StepOneandStepTwo).StepOnewillrepresenttwo-thirdsofthetotalandStepTwowillrepresentone-third.3)TheStepOneandStepTwofundswillbeallocatedamongutilitiesproportionallybasedontheirpercentageoftotalutilitytargets.4)StepOne:Eachutilitywillhavetheopportunitytoearnanincentiveifitreaches100%ofitsaggregatetarget,foryears2012-2015,bytheendof2015.TheamountitcanearnwouldbeitsproportionalshareofStepOne.5)StepTwo:Allutilitieswillearnanincentiveiftheentirestatewidejurisdictionalgoal(includingNYSERDAsshare)isachievedby2015.Theamountforeach utilitywouldbeitsproportionalsharebasedonitsshareoftheutilitiesaggregate targets.Ifthegoalisnotreached,noutilityreceivesanincentivefromStepTwo.6)Determinationofanyincentivethatautilityisqualifiedforunder(4)or(5),andthemechanismforpayment,willbemadein2016.7)Therewillbenoformulaicnegativeadjustmentsprovidedintheincentivemechanism.Eachutility,however,willbesubjecttoadjustmentinratecases,penalties,orotherproceedings,intheeventofpoorperformancethatisnotexcusedbymitigatingfactors.Note:TheCommissionwillrequirefurthercommentontheapplicationofthis frameworktogastargetsandgoals,asthereisno2015jurisdictionalgoalforgas comparabletothatforelectricity.Themannerinwhichancillarysavingsare countedwouldalsoneedtobedetermined.

APPENDIX5

SUMMARY

OFPUBLICCOMMENTSUtilityInterventionUnitoftheDepartmentofState(UIU)EEPSisacriticallyimportantprogrambenefittingNewYork,andshouldbecontinued.InrenewingEEPS,theCommissionshouldbearinmindtheoriginalintentoftheprogram,whichwasnotmerelycost-effectivenessbutalsotoslowclimatechange,andtoproducejobsfor NewYorkers.EEPSshouldbeconsideredalongwiththeSBCprogramsinacomprehensiveway.Eachhasaspectsthatcouldbenefittheother,e.g.therelativelyuncomplicatedadministrativestructure oftheSBC,andthestringentevaluationprogramofEEPS.Theoutreachandeducation programsandworkforcedevelopmentshouldbeintegrated.TheexistingsurchargebalanceshouldbereturnedtoratepayersinamannerthatdoesnotdisrupttheEEPSprograms.Anacrosstheboardreductionincollectionsisnotpractical;butthe alternativeisnottodonothing.TheTRCtestshouldnotbeapass-failtest,butshouldbeconsideredasaninput.TheTRCshouldalsobeamendedtoincreasetheweightofgreenhousegasreduction,aswellasjob creation.Thepercentageoflowincomebudgetsshouldbeincreasedtoaproportionallevel.Thisisparticularlyimportantgivenfederalspendingcuts.Investmentinwhole-houseweatherization programsarehighlycost-effective,wheneconomicmultipliereffectsaretakenintoaccount.

Further,thepercentageofresidentialbudgetsshouldbeincreasedfromthecurrent18%toa proportional39%.TheNFGCIPprogramshouldbeincorporatedintoEEPSinawaythatdoesnotcompromisethebestfeaturesoftheprogram.Effortstoachievegreateradministrativeflexibility,reduceoverlap,andrefineincentivesshouldbepursued.JointUtilitiesTheJointUtilitiesAreConEdison,Orange&Rockland,theNationalGridcompanies,andCentralHudson.Althougheachoftheseutilitiespresentedseparatecomments,commentsaresubmittedjointlyonanumberofcentralissues:TheWhitePaperproperlyconcludedthattimingissuesandtheeconomicdownturnareresponsibleformostoftheshortfallin2009-2010,andthefocuson2011resultsisreasonable.

Staffsrecommendedstrategyofreauthorizingmostprograms,withcontinuousimprovement,is reasonable;buttheremustbeatransparentprocessforexpeditedapprovalofnewormodified programs.DelegatingmoreauthoritytoStaff,versusrequiringCommissionaction,wouldavoid unnecessarydelays.

APPENDIX5-2-Uncommittedprogramfundsshouldberolledoverintofutureyears,althoughPAsshouldhavetheopportunitytoproposenewprograms.PAsshouldnotbeforcedtoproposeBlockBiddingprograms,butshouldbeallowedtoconsiderwhethersuchprogramsfitwithintheir territories.Using2011targetsandbudgetsasastartingpointforreauthorizationisreasonable,butbeginning2013theseshouldbeadjustedtoreflectpotentialstudies.Thejurisdictionalportionofthe2015goalremainsareasonabletarget;butafterappraisingallfactorstheCommissionshouldconsiderwhetherthegoalisattainablewithinthecurrenttimeframeandbudget,especiallygiven thepotentialeffectofchangesinlightingstandards.Afurtherdecisionshouldbemadepriorto 2013,informedbypotentialstudies.Althoughthe2015goalshouldnotbeextendedatthistime, itwillbeimportantinthefuturetoextendtheprogramsbeyond2015.Surchargecollectionsshouldnotbesuspended.Thereisastrongchancethatthesurchargebalancewillbereducedbytheendof2011.Ifcollectionsareadjusted,thereshould beanautomaticmechanismtoallowcollectionstoresumeatfullpaceifafundbalance representslessthanthreemonthsestimatedspending.Interferencewiththecontinuityof programsshouldbeavoided.Costeffectivenesstestsshouldbeexpandedtoaccountforbenefitssuchasshorttermmarketpriceeffects,environmentalexternalities,reducedcapitalspending,andreducedstreet work.ThelargestdifferencebetweenNewYorkandmostotherstatesisNewYorksinsistence onapplyingthetestatthemeasurelevelratherthantheprojectlevel.Thisresultsinlost opportunities.Althoughexistingprogramsshouldnotbereevaluatedwithanewtest,newprogramproposalsshouldbesubjecttoanupdatedTRCanalysis,usingnewLRACs.TheIAGshould participateindevelopingnewLRACs.TheimpactofnewlightingstandardsshouldbediscussedandresolvedbytheIAG.LowincomecustomersparticipateinEEPSprogramsotherthanthededicatedlow-incomeprograms.Definitionoflow-incomecustomersthroughutilitybillingsystemsisproblematic.Althoughlow-incomecustomersdedicatealargerportionoftheirincometoenergy,lowincomehouseholdstendtouselessenergyonaverage.Withouttakingapositionon thecorrectpercentage,meetingefficiencygoalsshouldbethehighestpriority,andresources shouldnotbeshiftedfromotherresidentialprograms.TheIAGshouldtakeuptheissueofeligibilityforinterruptiblegascustomers,whichshouldnotbelimitedtotemperature-controlledcustomers.Impactsonutilityrevenueswillbea crucialissue,alongwithequipmenttypes,budget,andfuelconversions.TheCommissionshouldusecautioninconsideringself-designedprogramsforlargecustomers.Thecostofaself-designedprogrammaybelargerthantheindividualcustomers surchargecontribution.Also,suchprogramswouldrequirescreeningandevaluation,whichcouldbeburdensome.

APPENDIX5-3-AmortizingEEPSrecoveryovermulti-yearperiodsshouldbeconsidered,althoughStaffcorrectlyidentifiesthepotentialdrawbacks.TheIAGshouldconductastudytoproduceuniformeligibilitystandardsforpartiallyexemptcustomers.ThepaymentofanyamountofEEPSsurchargeshouldmakeacustomereligible.Financialobstaclescaninhibitcustomerparticipation.Programadministratorsshouldbeencouragedtosubmitinnovativefinancingproposals.Programadministratorsshouldbegivenmuchmoreflexibilitytorespondtocustomerdemandandchangingcircumstances.Theyshouldbeabletoshiftfundsamongprograms,andresultsshouldbeassessedattheportfoliolevel,nottheprogramlevel.Ratherthanaccounting forspendingandachievementsonanannualbasis,athree-yearwindowwithvariabilityupto33%shouldbeused.Staffiscorrectthatuncommittedprogrambudgetsshouldberolledover fromyeartoyear.BettercoordinationbetweenNYSERDAandutilitiesisessential.TheIAGshouldaddressthisissue;however,theIAGwillneedmoreresourcestoperformallofitstasks.The IAGisavaluableforum,butitmusthaveadditionalsupportstafftobemoreeffective.Multifamilyprogrameligibilityforutility-runprogramsshouldbeincreasedto200units.ThiswouldexpandparticipationwithoutunderminingtheNYSERDAprogram.Utilityshareholderincentivesshouldnotbeeliminated.Theyshouldberedesigned,andinformedbyefficiencypotentialstudies,andnegativeincentivesshouldbeeliminated.Staffsdescriptionsofutilitybehaviorinfluencedbyincentivesarenotsupportedbyfacts.NoadditionalEEPSfundingshouldbeprovidedforworkforcedevelopment.NYSERDAprovidesnobasisforstatingthatitshouldbetheexclusiveproviderinthelargeC&Isector.UtilityC&Iprogramshavebeensuccessful,andaretailoredtothetypesofcustomersthatareprevalentinindividualutilityterritories.Cost-effectivenessmustbebalancedwithportfoliobalanceasagoal.Instatingthatitsprogramsarelesscostlythanutilities,NYSERDAdrawsinappropriatecomparisons.Thelarge majorityofitssavingshavecomefromitsresidentialCFLlightingprogram,whileutilitieshave beenrequiredbytheCommissiontoimplementmoreexpensiveprograms,suchasdirectinstall smallbusinessprograms.Requestsforspecialinterestfundingshouldberejected.LimitedEEPSfundingshouldremainwithprogramadministrator-runprograms.Beforereallocatingresourcestolowincomeprograms,morestudyisrequiredtodeterminethecontributionsoflowincomecustomersandtheextenttowhichtheyparticipateinprogramsnotdirectlyorientedtowardlow-income.

APPENDIX5-4-Staffshouldworkdirectlywithprogramadministratorstosetnewprogramtargets.Itislikelythatthecosttoachievewillincrease,asmanyoftheearliestsavingsweretheeasiesttoacquire.NewYorkStateEnergyResearchandDevelopmentAuthority(NYSERDA)Thecurrent15by15goalisreasonable,andthemajorityofprogramsshouldbecontinuedonamulti-yearbasis.TheNYISOsanalysisofthe2015goalusesaflawedapproach,comparingdissimilarprogramsandnotcountingencumberedfunds.Thereasonsforshortfallsinthefirstthreeyearsextendbeyondtheeconomyandtimingissues.SeveralrulesimposedbytheCommissionhaveimpairedimplementation,includingthe useoftheTRCformeasures,andthecumbersomeprocessforapprovingmodificationof programs.AspartoftheprocessofcontinuousimprovementadvocatedbyStaff,theCommissionshouldconsideralternativestothecurrentregulatoryprocess.TheJointUtilitiesarecorrectinproposingthatfundsshouldbefreelytransferrableamongapprovedprograms.But PAsshouldnothavethediscretiontoimplementnewprogramswithoutCommissionapproval.Thestartingpointforprogramtargetsshouldbe2011targets,refinedasneeded,althougheffortneedstobemadetoaccountforprogramswithlongleadtimes.Targetsshouldbeusedforplanningpurposes;establishinghardannualtargetscanbecounterproductive.Whenconsideringshiftingoffundsamongprograms,budgetsshouldacknowledgeprogramsthattend tohavelongleadtimes.Staffsproposalsregardingborrowingfromfuturebudgetyearsisgenerallyreasonable;however,flexibilitywillbeneededforprogramswithlongleadtimes.Theproposaltoreportonacommitmentaccrualbasisisreasonable.Measureincentivelevelsshouldbereviewed,toanalyzewhethersomeprogramsappeartobesuccessfulonlybecausetheyareofferinghigherincentivesthanarenecessary.CostperMWhachievedshouldbeafactorinallocatingfundsamongprograms.IftheCommissiondeterminesthatnewprogramsareneededtomeetitsgoal,itshouldnotallocateuncommittedsurcharges,assuggestedbyStaff.Itshouldaddtoexistingsurcharges, takingintoaccountthatexistingsurchargelevelsare$44millionperyearlowerthananticipated inthe2008EEPSOrder.Inidentifyingoutliersandrecommendingactionregardingthem,programadministratorinputisessential.RequiringtheTRCtobeappliedatthemeasurelevelhasledtomissedopportunitiesforsavingsmuchdeeperthancanbeattainedusingthecurrentapproach.TheCommissionscurrent ruleoveremphasizesshort-termsavingsandcouldmakeitmoredifficulttoachievelongterm goals.TheTRCshouldbeappliedattheprogramandportfoliolevels.Screeningatthemeasure levelandscreeningduringimplementationshouldonlyberequiredunderconditionsthatprovidemuchgreaterflexibility.

APPENDIX5-5-AsidefromtheTRC,costperunitofenergysavedshouldbetakenintoaccount.NYSERDAscostperunitofenergysavedismuchlowerthantheaverageforallPAs.Staffisincorrectwhenitsaysthatstand-aloneauditprogramstendnottobeeffective.NYSERDAsFlexTechprogramisreportingameasureadoptionrateof65%.Staffscriticismismoreonpointwithregardtosmallcustomerauditprograms,wherethemeasureadoptionrate islower.Staffsanalysisofprogramdeliveryoptionsdidnotdiscusscustom-designedprograms,whichhavebeenveryeffective.Staffiscorrectinadvisingthataflexibleapproachtogeographicequityshouldbemaintained.Lightingprogramswillneedtoberevised.Evenwithnewstandards,anupstreamprogramwillstillbeimportanttogainingwidespreadmarketacceptanceofnewlighting technologies.TheIAGisanappropriateforumfordiscussingthisissue.Thepercentageoflow-incomefundingshouldbeincreased.DemandforEEPSprogramswillincreaseasfederallyfundedprogramsarereduced.Thedeclineinfederalstimulusfundingthreatenstohaltthemomentumofweatherizationprogramsandstrandtheworkforce.TheCommissionanticipatedthisinits2009GasEEPSorder,andtheCommissionshouldnow followthroughonthatrationale.Althoughitwouldbereasonabletoallocate40%ofresidential fundstolow-income,30%istheminimumthatwouldbeappropriate.NYSERDAshouldhavetheflexibilitytotransferfundsfrommarket-rateresidentialprogramsintolowerincomeprograms,basedondemandforservices.InterruptiblegascustomersshouldbemadeeligiblefortheEEPSprogram.Theineligibilityofinterruptiblecustomersgreatlyreducesthepotentialreachofthemultifamily programs.Includingthesecustomerswouldalsoaidinthetransitionawayfrom#4and#6 heatingoil.Thisinitiativeshouldincludenotonlymultifamilybuildingsbutallinterruptible customers.Self-designedprogramshavepotentialandwarrantconsideration.Arecentpaper,however,cautionedthatthereareinsufficientdatatosupporttheseprogramsatthistime.Collectionofsurchargesshouldnotbeamortized.Notonlywoulditincreaseoverallprogramcosts,butitcouldleadtounintendedconsequencesforutilitybalancesheets.Theissueofintergenerationequityisnotcompelling,asthelife-spanofefficiencyinvestmentstendstobeshorterthanotherutilityinvestments.Itisalsounclearwhetherstandardaccountingruleswould allowforthistypeofcapitalization.PartialSBCcustomersshouldbefullyeligibletoparticipateinEEPSprograms.Theyrepresentalargeamountofefficiencypotential,andcurrentinconsistenciesinthewaytheyareservedpreventsthispotentialfrombeingrealized.

APPENDIX5-6-ProgramadministratoroverlapisacriticalissuethatshouldbeahighpriorityforresolutionbytheCommission.TheissueshouldnotbedelegatedonlytotheIAG;itshouldincludeabroadergroupofstakeholders.ATechnicalConferenceshouldbeconvened.Staffshouldreevaluateitsstatementthatcleardelineationisnotapromisingapproach.Cleardelineationisnotinconsistentwiththegoalofgreatercollaboration.Infact,clear delineationmakescollaborationworkbetter.Thecurrentdelineationinthelowincomesectorhasproducedgoodresults,andNYSERDAhasbeenabletocollaboratewithmanyPAs.Simplyrequiringidenticalincentivelevelswillnotbeproductive.Similarly,increasingtheunitcapfor themultifamilyprogramwillexacerbateprogramoverlapissues.OnemodeofdelineationintheC/Isector,thatwouldresolvecurrentproblems,wouldbeforNYSERDAtoberesponsibleforcustomerslargerthan100kW,withutilitiesresponsiblefor smallercustomers.ApolicyforapplyingadjustmentfactorsshouldbedevelopedbytheEvaluationAdvisoryGroup,tobetterpromoteconsistencyinreportingandmeasuringagainstgoals.Interactiveeffectsamongprogramsalsoneedtobeconsidered.Statewidestudiesandjointevaluationefforts shouldbecontinued;however,moredefinitivebudgetallocationsareneeded.NYSERDAs effortsinevaluatingprogramsareseverelyhamperedbylackofaccesstonon-participantdata,whichishamperedbyprivacyrules.TheStatesparticipationintheEM&VForumisinvaluableandshouldbecontinued.TheefficacyofmarketingeffortsisenhancedwhenPAshavetheflexibilitytorespondbychangingbudgets.Thereremainsalargeuntappedmarketforenergyefficiency,andOEM willbeessentialindevelopingit.EvaluationofOEMshouldcontaintwoapproaches:marketingperformancemeasurement(MPM);andevaluation,measurementandverification.EM&Viseffective,butnotascarefullytailoredtoOEMasMPMis.Combined,theyprovideamorecompletepicture.NYSERDAsworkforcedevelopmentprogramshavebeensuccessful.Becauseanticipatedfederalfundingwasnotawarded,however,additionalfundingwillbeneededtobuild onthissuccess.NYSERDAanticipatesaneedforapproximately$6.5millionperyear.UtilityshareholderincentivesshouldnotbepaidfromuncommittedEEPSfunds;theseshouldbededicatedtoefficiencyprojects.Suggestionsthatthesplitincentiveproblemcanbeaddressedsimplybeincreasingincentivesareshortsighted.Theymightassistinachievingneartermgoals,buttheywilldonothingtosolvethelong-termproblemofsplitincentivesandtheyareunlikelytochangebehavior.Energy-alignedleasesareawaytoaddresstheprobleminalongtermsystematic fashion.Territory-specificpotentialstudiesarenotneededandareunlikelytorevealsignificantdeviationsfromstudiesthathavealreadybeenperformed.NYSERDAhasinitiatedacomprehensivestatewidepotentialstudyencompassingnotonlyefficiencybutrenewableenergyandgreenhousegasreductionpotential.

APPENDIX5-7-TheutilitiesproposaltoestablishfinancingmechanismsforC/Icustomersshouldbesupported,andshouldnotoverlapwiththerevolvingloanfundforsmallercustomersthatNYSERDAisrequiredtoestablishunderstatute.NationalFuelAccountabilityCoalition(NFAC)NFACcomprisesfifteenmemberorganizations.NFACsupportsthebroadgoalsofEEPSbuthasfourspecificconcerns:Programsorientedtowardlow-incomecustomersshouldreceive50%oftotalfunding.Therearefivepointsinfavorofthisposition:(1)A50%low-incomeallocationwillcorrectforotherregressiveaspectsoftheEEPSprogram.EEPSvolume-basedfeestructuresareregressive,becauselow-income householdstendtousemoregasthanhigh-incomehouseholds.Also,theemphasisonappliancerebateprogramsfavorshigher-incomehouseholds.Low-income customershavedifficultyparticipatingintheseprograms.Participationratesinthe high-incomezipcodesofNFGsterritoryarethreetofourtimeshigherthaninthe low-incomezipcodes.(2)Low-incomeprogramscreatemorejobsthanappliancerebateprograms.ThisshouldbereflectedintheTotalResourceCostanalysisofprograms.(3)Morelow-incomeallocationisneededtoaddressthecurrenteconomiccrisisfacedbylow-incomeNewYorkers.(4)Agreaterlow-incomeallocationisneededtoavoidstrandingtheinvestmentinworkforcetraining.AstheCommissionacknowledgedinanearlierorder,low-incomefundingshouldbeincreasedafter2011toavoidstrandingthegreenjobs infrastructurethathasbeendeveloped.(5)Theexistenceofotherlow-incomeprograms(e.g.WAP)doesnotsupportlowerfundingforEEPSlowincomeprograms.ThedeclineinfederalfundsfortheseprogramscreatesagapthatshouldbefilledbyEEPS.EEPSshouldutilizemorewhole-houseprograms.Manyexpertsconsiderthewhole-houseapproachtobethebestpractice.Whole-houseprogramsarenotnecessarilylesscost-effectivethanrebates,andmaybemorecost-effective,especiallyifjobcreationisfactored.

Whole-houseprogramshaveamuchlargereconomicmultipliereffect(locally)thandoappliancerebates.EEPSprogramadministrationshouldbestreamlinedandshiftedentirelytoNYSERDA.CompetitionbetweenNYSERDAandutilitieshasledtoconfusionandunderperformance.ShiftingallresponsibilitytoNYSERDAwouldeliminateoverlapandenableone-stopshoppingforcustomers.ItwouldalsofacilitatetheintegrationofotherNYSERDAprogramsintoEEPS.Utilitiesasprogramadministratorshaveconflictinginterests,andmaybemoreinterestedinbuildingtheirbrandsthaninprovidingthebestefficiencyservices.TheEEPSprogramshould bemoretransparentandaccountable.

APPENDIX5-8-Theoutreachandmarketingprogramshouldpresentone-stopshoppingtosimplifyaccesstoefficiencyprogramsforcustomers.NationalFuelGas(NFG)StaffsgeneralrecommendationtoextendEEPSprogramsthrough2015,subjecttoimprovements,isreasonable.TheConservationIncentiveProgram(CIP)shouldbeincorporatedintoEEPS,butsomeofitsuniquefeaturesshouldremainunchanged.Therebateschedule,andlow-incomefunding,shouldremainatcurrentlevels.Therebateprogramhasbeensuccessful.Ifrebatelevelsare orderedtobeswitchedtothelevelsforotherEEPSprograms,atransitionperiodshouldbeallowed.Thecommercialrebateprogram,contractedtoNYSERDA,hasbeensuccessful,andthepartnershipwithNYSERDAshouldberetained,withNYSERDAdedicatingallfundstothe NFGserviceterritory.Similarly,thelow-incomeweatherizationprogramshouldberetained, andoperatedbyNYSERDA.CurrentfundingfortheCIPlow-incomeprogramis30%ofthe total,andmuchmorethan30%ofresidentialfunding.Theexistingoutreachandeducation programshouldberetained,althoughfundingcouldbereducedby25%.BecauseauthorizationforCIPexpiresNovember30,2011,andnewEEPSauthorizationswillnotoccuruntilJanuary1,2012,aninterimextensionshouldbegrantedtomaintainCIP.WithrespecttoNYSERDAsstatewideprograms,NYSERDAshouldberequiredtoidentifycustomersintheNFGterritorywhoareparticipatinginNYSERDAprograms,sothat NFGcanworkwithNYSERDAtoincreasecustomerparticipation.ThedisadvantagesofamortizingEEPSrecoveryoutweightheadvantages,primarilybecausetheadditionofcarryingchargeswouldincreasetotalcosts.Staffsrecommendationsforyeartoyearbudgetingmechanismsshouldbereplacedbyasurcharge/refundmechanismsimilartotheonecurrentlyusedbyNFG.Thiswouldpreventthe accumulationofunspentfunds,andallowoverspendingbudgetswherewarranted.EdwardRath,ErieCountyLegislatorThecurrentalignmentofCIPprogramsiseffectiveandthechangesurgedbyPeopleUnitedforSustainedHousingshouldnotbeadopted.

NOTE:NumerouscommentswereprovidedinformallythroughemailtotheSecretaryregardingtheNationalFuelprograms.ManysupportedthepositionofNFACthattheprogramsshouldberealigned.Othersstatedthattheprogramsshouldbecontinuedintheircurrent configuration.PaceEnergyandClimateCenter,NortheastEnergyEfficiencyPartnerships,andNaturalResourcesDefenseCouncil(alsojoinedbysixotherorganizationsadvocatingforcleanenergypolicies)

APPENDIX5-9-EEPSshouldbecontinuedandfundedatcurrentlevels.RecentdevelopmentsinIAGcooperationandstreamliningofapprovalsareencouraging,butinsufficient.Moremustbedonetoavoiddelaysinapprovalofnewormodifiedprograms.DelegationtoDPSStaffshouldbe increasedtoavoidthedelayscausedbySAPA.OncePAshaveexhibitedcompetencyat managingprograms,theyshouldnotneedCommissionapprovalforeveryprogramchange.

Staffshouldclearlyarticulateaprocessformodificationofprogramsandapprovalofnew programs.Greatlyimprovedstatewidecoordinationofprogramdeliveryisneeded.TheWhitePaperdoesnotoffersolutionstotheproblemofoverlap.TheIAGshouldmakethisatop priorityforthecomingyear,andtheIAGwillneedgreaterresourcestoaccomplishthisalong withitsothertasks.Onewaytoincreasecooperationisthroughasinglestatewidewebsite directingcustomerstoprograms,similartowhatisdoneinCalifornia.Itisimperativetoretainutilityshareholderincentives.Staffincorrectlyblamesincentivesformanyoftheimplementationproblemsthatareactuallycausedbyslowapprovals, lackofflexibility,andunclearrolesforNYSERDAandutilities.TheexistenceofRDMs removesdisincentivestoutilityactivity,butitdoesnotprovideanincentive.Utilitiesmustbe encouragedtomakeefficiencypartoftheirbusinessmodel;thisshouldbedonewithclear verification,andscaledincentivesthatrewardexemplaryperformancebeyondthetarget.Negativeadjustmentsarealsoessential,althoughutilitiesmaybeexcusedwhereprogramapprovaldelaysarenottheirfault.TheTRCtestaswellasitsapplicationneedstobechanged.Thiscannotbedelayed.Programsshouldbeevaluatedattheportfoliolevel.Anavoidedcoststudyshouldbeperformed, followedbyaTechnicalConferencetomakelongoverduechangestothetest.Asocietaltestshouldbeadded,andwholesaleenergypriceimpactsshouldbeconsidered.(furtheranalysisiscontainedinanappendix,describedbelow)Onlyasmallportionofthestatesbuildingshaveundergoneefficiencyretrofits.Marketbarrierssuchassplitincentivesareresponsibleforsomeoftheshortfalls.Energy-alignedleases areonewaytoovercomethebarrierofsplitincentives.Innovativefinancingmethodsare anotherway;amulti-yearloan-lossreservefundshouldbeconsidered.EEPSprogramadministratorsshouldbeprovidedwithmethodsforbetterintegrationofcodesandstandardsdevelopment.LIPAandNYPAefficiencyactivitiesneedtobemonitored andtheirperformanceconsideredalongsideEEPStoevaluateprogresstowardstatewidegoals.Self-directedprogramsforlargecustomersshouldnotbeadopted.Suchprogramswouldstillrequireindependentevaluation,andthecustomerwouldlosetheabilitytoleverageotherEEPSfunds.Performanceinthemultifamilysectormustimprove.Theunitcapof75unitsshouldberemoved;largermultifamilybuildingshaveagreaterpercentageofpublicareas,sotheprojected savingsfromsmallerbuildingsareoverstated.Multifamilyprogramsmustbedelineatedfrom C&Iandsmallbusinessprograms.Low-incomeprogramsareimportant,andtheCommissionshouldconsidertheneedtoincreasefundinginlightofreducedfederalfunding.

APPENDIX5-10-OptimalAnalysisofCost-EffectivenessTests:StaffiscorrectthattheProgramAdministratorsCosttestisproblematic.StaffidentifiedthreevariantsonthecurrentTRCthatwouldbeimprovements.The5.5%discountrateinthecurrenttestistoohigh.Additionalbenefitsthatshouldbeincludedinthetestare:HigherCO2emissionvalues.StaffdiscussesapotentialincreaseoftheCO2valuefrom$15pertonto$50perton.ArecentNewEnglandstudydeterminedthatthecostofCO2 mitigationismorelikelytobe$80/ton.98%ofthefuturecostofCO2mitigationisexternalto themarketpriceofenergy.Operatingandmaintenancecostsavings.Efficiencymeasurescanhaveasignificantimpactonmaintenancecostsforcustomers,e.g.reducingthecostofreplacingbulbs.These benefitsshouldbecountedforspecificprograms,wheretheyaresignificantandreasonablyquantifiable.DemandReductionInducedPriceEffects(DRIPE).DRIPEhasbeenassumedinthepasttobeashort-livedphenomenon;asmarketsadjusttolowerpricesbydelayingsupplyincreases,whichincreasesprices.ArecentNewEnglandstudyshowsthatthepriceimpactsofDRIPEare greater,andlastmanyyearslonger,thanhavebeenpreviouslyassumed.TheWhitePaperalsostatesthatDRIPErepresentsatransferpayment;thisisnotthecase.Higherdemandrequiresuseofmoreexpensivegeneratingresources;reducingdemandhasasocietalbenefit.Moreover,to theextentDRIPErepresentsatransfer,itisatransferthatbenefitsNewYorkers.Non-regulatedenergybenefits(NEBS).NEBSresultfromefficiencymeasuresinvariousforms.Manyofthemaretangibleandquantifiable,suchassavingsinwater,oil,keroseneandpropaneuse.WhereNEBSaresignificantandreasonablyquantifiabletheyshouldbeincludedintheTRCcalculation.NewYorkStateElectric&GasandRochesterGasandElectricCorporationTheStaffrecommendationtoreauthorizeexistingprogramsandthestrategyofcontinuousimprovementshouldbesupported.Theexistingprogramshaveacquiredmomentumandaremakingsatisfactoryprogress.Theprocessofcontinuousimprovementshouldallowfor modificationorreplacementofprogramsasindicatedbyavailableevidence.Targetsfor reauthorizationsmadeinOctober2011shouldbeestablishedcollaborativelybetweenStaffand theprogramadministrators.TheprogramsshouldbedevelopedonatrajectorytoachievetheStates15by15goal;butannualtargetsshouldbeusedflexiblyforplanningandevaluationpurposes.Extendingthegoalsto2018,atlowerlevels,wouldrisklosingmomentumatthistime.Negativeoutliersshouldbediscontinued,butonlyafteracarefulreviewastowhethertheyhavethepotentialtoimprove,orwhethertheyserveanimportantportfolioneed.

APPENDIX5-11-TheCompaniesCommercialandIndustrialPrescriptiveProgramshouldbeconsolidatedwithitsCustomRebateProgram;apetitionwillbefiledrequestingthisconsolidation.Uncommittedsurchargebalancesshouldremaininplaceforthetimebeing.Therearenumerousfactorscontributingtouncertaintyregardingthetotalofuncommittedfunds,particularlythemannerinwhichNYSERDAisfundedthroughutilitycollections,whichmakes theCompaniesunabletoaffirmthefiguresrecitedbyStaff.2011commitmentsmaycauseasignificantreductioninthesurchargebalance.TheTotalResourceCostTestshouldcontinuetobeappliedasis.Althoughtherearepotentialtheoreticalimprovementstothetest,theywouldalsomakeitmorecomplexandlessconsistentandreliableinapplication.StaffshouldworkwiththeIAGtostudyprogrammodificationsthatmightbeneededregardinglightingmeasures.WithrespecttoT12applications,thereshouldbenointerruptionin programsatleastthrough2012.ThecontinuationofCFLmeasuresisamorecomplexissue.Lowincomeprogramsshouldnotbesubjecttoastrictpercentage.Lowincomemeasuresshouldbeofferedwithinexistingprograms.MeetingtheStatesefficiencygoals shouldbethehighestpriority.AsubcommitteeoftheIAGshouldbeformedtoconsidereligibilityofinterruptiblegascustomers.Althoughtheproposal,asstatedbyStaff,primarilyaffectsdownstatecustomers,itisrelevanttotheCompaniesandthesubcommitteeshouldbeopentoanyprogramadministrator.

Splitincentivesmustbeaddressed,andmakingprogramsattractivetopropertyownersis essentialtomaximizeparticipation.Self-directedcustomerprogramsareunnecessary.TheCompaniesBlockBiddingprogramsalreadysatisfythatdemand.Moreover,participantsinthatprogrammaygainaccess toalargershareoffundsthantheywouldthroughaself-directedprogram.SBCcollectionsshouldcontinuetoberecoveredasexpenses.Consistentstatewideeligibilitystandardsshouldbedeveloped.Staffsrecommendationsforyear-to-yearbudgetingrulesaregenerallysound.Appliedtoshareholderincentives,however,theymayproduceinequities,whichisanotherreasontoeliminateincentives.Withrespecttoproposedrulesforborrowingfromfutureyears,Staffs proposalisreasonable,butcouldbeimprovedintwoways.Programsshouldbeallowedtoexceedannualbudgetsbymorethan120%iftheyareusinguncommittedfundsfromapreviousyear.Theyshouldalsobeallowedtoexceed120%ofanannualbudgetiftheyareusingfunds formanunderperformingprogramthatservesthesamecustomersector.ProgramadministratoroverlapshouldbeaddressedbyhavingNYSERDAfocusonmarkettransformationandutilitiesfocusondirectofferingstocustomers.TheIAGhasbeeneffective,andithasnotbeenfocusedonincentivestothedetrimentofitsothertasks.

APPENDIX5-12-Utilityshareholderincentivesshouldbeeliminated.Staffisincorrectthatincentiveshavecausedutilitiestoaimlow,butthereareindependentreasonsforeliminatingincentives.CoordinationwithNYSERDAwillbeeasiertoaccomplishintheabsenceofutilityincentives.

Moreover,astheCompanieshavearguedsince2008,utilitieshavelimitedinfluenceoverthe behaviorofcustomers,anditisunwisetosubjectutilitiestoincentivesbasedonresultsover whichtheyhaveminimalcontrol.Ifutilitiesareretained,theyshouldbepositiveincentivesonly.TheProcessportionsofevaluationbudgetsshouldbedirectedto:programmarketing,outreachactivities,state-widemarketing,andstate-wideefficiencypotentialstudies.Impactevaluationsshouldcontinue.Statewideoutreachandeducationfundsshouldberedirected,inpart,toutilities.Thepercentageofprogramfundsforoutreachandmarketingshouldnotdecline.Outreachand marketingshouldbeevaluatedusingapercentageoftheEM&Vbudgets.Additionalfundingforworkforcedevelopmentisnotwarranted.PartiesarguingthatutilitiesuseEEPSfundingforself-promotionareincorrect.TheappropriateusesofEEPSfundingareclearlydescribedinEEPSorders.

ConsolidatedEdisonandOrange&Rockland(theCompanies)TheCompaniesfiledasupplementtotheJointUtilitycommentstowhichtheyalsosubscribed;thesupplementalcommentsreferprimarilytoissuesmorespecifictotheCompaniesserviceterritories.Lookingbeyond2012,EEPSprogramsshouldbereworkedtoprovideholisticsolutionsthataddressdemandmanagementandpowerqualityandaresupportedbyratestructuresthatencourageoff-peakuse.ConEdisonhassuccessfullyreducedpeakdemandthroughitsTargeted DSMprogram,andmorecapitalinvestmentintransmissionanddistributioncouldbedeferredif EEPSweremorefullyintegratedintothisapproach.TargetsforEEPSprogramsshouldbeadjustedtoreflectlessonslearnedinthe2009-2011period.Examplesofinformationgainedthroughexperienceincludechangedestimatesof marketdemand,andtheimpactsofseasonalfluctuationsindemand.Sectorequityisanimportantgoal.Regardlessofthepercentageoffundingdetermined,noadditionalprogramsneedtobecreatedtoservelow-incomecustomers.EEPSprogramscouldoperatemoreefficientlyifprogramadministratorswereprovidedmoreflexibilityinshiftingmoneybetweenprogramsandchangingprogramstorespondto marketconditionsandtestnewinitiatives.Shiftingmoneyamongprogramsshouldbeperformed onanintra-classbasis.Shiftingmoneyamongprogramsshouldnotresultinanautomaticshiftingofprogramtargets.

APPENDIX5-13-ConEdisonsmulti-familyprogramsshouldbeexpandedtobuildingswithmorethan75units.ThiswouldnotconflictwithNYSERDAsprogram,becausesomecustomerspreferNYSERDAswholebuildingapproachandotherspreferConEdisonsapproach.TheCityisincorrectinstatingthattherearenoprogramsforone-and-twofamilybuildingsinNewYorkCity.ThosebuildingsareservedbyseveralConEdisonprograms.InadditiontodirectcommentsfromConEdison,numerouscontractorsworkingwithConEdisononEEPSprogramssubmittedcommentssupportingEEPSingeneralandthe continuationofConEdisonprogramsinparticular.ConEdisonandO&Rwillproposeimprovementstoseveraloftheirprograms.St.LawrenceGasCompany,Inc.EEPSprogramsshouldbereauthorizedthrough2015.TheresidentialprogramsofSt.LawrenceGashavebeenhighlysuccessful.Splitincentivesneedtobeaddressedtoimprovethe performanceofcommercialprograms.Unspentprogramfundsshouldberolledoverintofuture years.Rebatelevelsshouldbereviewedonanongoingbasis.AssociationforEnergyAffordability,Inc.(AEA)TheWhitePaperprovidesacomprehensiveassessment,anditscorerecommendationthatprogramsshouldbecontinuedatcurrentfundinglevelsshouldbeendorsed.Utilityincentivesshouldbeeliminated.Staffiscorrectthattheyhavehadcounterproductiveresults.Multifamilyshouldbeconsideredaseparatecustomersector.ThemultifamilyprogramforNewYorkCityneedstobecorrected.Thebuildingstockdiffersconsiderablyfromstockinotherpartsofthestate,andmetricsdesignedforupstatebuildingswillnotworkforNewYork Cityprograms.TheTechnicalManualfailstoreflectthesedifferences.Further,thecapof75 unitsshouldbeeliminated.Theaveragecommonareaelectricusagecalculatedforlargerbuildingscannotbeappliedtosmallerbuildingswithoutdistortingprogramresults.Addingeligibilityofinterruptiblecustomersishighlyimportant.Thiscouldbedonebyestablishingaminimumannualgasusageasthecriterionforeligibility.AEAwouldliketoparticipateinanIAGsubcommitteetoaddressthisissue.Annualbudgetingshouldbeeliminatedinfavorofmulti-yeartargets.Savingsandexpendituresshouldberecordedonacommitmentaccrualbasis.

ThesuccessfulexperienceofNYSEGsmultifamilyprogramshouldbestudiedandreliedon.Lowincomefundingshouldbeincreasedtoatleast30%oftheresidentialallocation.Coordinationwiththedrop-offinfederalstimulusfundingisessential.Buildingsthatmeetthe APPENDIX5-14-WAPcriteriaforeligibilityshouldbetargeted.Somepercentageofhouseholdsinmarketratemulti-familybuildingsarelow-income.Splitincentivesinmulti-familybuildingsneedtoberesolved.Onewaytodothisistoincreaseincentivelevels,and/orprovidemeasuresfreeofcustomerparticipation.CFLsshouldbeprovidedfree.Incentivesshouldbeincreasedtorecognizetheimpactofthesecondary refrigeratormarket,andtoincentivizebuildingownerstoreplacerefrigerators.CommunityEnvironmentalCenter(CEC)Aftersomedelays,theinfrastructureofenergyefficiencydeliveryisinplace,andshouldbemaintained.PAsshouldbegivengreaterflexibilityinrespondingtomarketconditions.Inparticular,theincentivemodificationcapof20%shouldbechanged.Surchargesshouldnotbereducednow,whenprogramsareachievingathigherlevels.TheTRCshouldbemodifiedtoaccountformoreenvironmentalbenefits.Becausethiswilltaketime,inthemeantimethecost-effectivenesshurdleshouldbereducedto0.7asaproxyforthelikelychangesinthetest.Theproposed$50/tonmonetizationofcarbonisreasonable, althoughahigherfigurewouldbeconsistentwithstudiesperformedinEurope.Thetechnicalanalysisofrefrigeratorsavingsneedstotakeintoaccountthesignificantsecond-handmarketforrefrigeratorsinNewYorkCity.Lightingcontinuestobeanessentialfeatureofefficiencyprograms.Apackageapproachtoefficiencyprojectsismuchmoreeffectivethanameasure-by-measureanalysis.Thelow-incomepercentageshouldbeincreased,especiallyinlightofreductionsinfederalfunding.Theparticipationoflow-incomecustomersinmarket-rateprogramsisminimal.Low-incomeprogramsmeetingcost-effectivenesstestsdonotpresentsignificanttrade-offswith otherpolicygoals.Asignificantportionofmultifamilybuildingsaredualfueled,andexpandingeligibilitytothesecustomersisessentialtoexpandingparticipationinthissector.A$9millioninitial budgetwouldbereasonable.ConEdisonhasmadebesteffortstoachieveitstargets,notwithstandingStaffsdescriptionofutilitybehaviorasaffectedbyincentives.Staffdelaysmayhavemorethan anythingelsetodowithinabilitytomeettargets.Utilityopt-outsshouldbeconsidered.Community-basedoutreachstrategiesaremoreeffectivethanmedia-basedstrategies.Also,asingleinteractivewebsiteshouldbeavailableforallprograms.NYSERDAsworkforcedevelopmentprogramshavebeeneffective.

APPENDIX5-15-NewYorkIndependentSystemOperatorTheEEPSprogramingeneralisavaluableinitiative.ForecastsofenergyefficiencymustberealisticfortheISOtoplanNewYorkspowersystem.ExperienceshowsthatfullachievementoftheCommissionsgoalby2015isnotfeasible.Totalexpenditureshavenotyet exceeded$250millionperyear.BasedonexperiencesincetheinceptionofEEPS,itappears thatmostoftheprojectedsavings(1,397GWh)canbeobtainedfor$195million,whilethelast48GWhcostnearly$70million.Actualsavingsreportedforthe2011calendaryeardonotshowalargeincreaseinsavings.TheCommissionhaspublicpolicyreasonsforsupporting somelowerperformingprograms,butmaintainingthoseprogramsmeansthatoverallprogram goalswillnotbereached.TheCommissionshouldreduceannualspendingtotherangeof$200-250millionuntiltheabilitytospendhigherlevelsinacosteffectivemannerhasbeendemonstrated.Reducingspendingto$250millionwouldallowtheEEPSgoaltobeachievedin2017.Whennegativeoutliersareremovedfromtheportfolio,theirtargetedsavingsshouldberemovedfromthegoalaswell.Whilecontinuityofprogramsmustbemaintained,theTRCneedstoberevisitedfrequently.NationalGridNationalGridsupportsStaffsrecommendationsthatitreallocatefundsawayfromitsHomeSealingIncentivesProgramanditsResidentialEnergyStarProductsprogram.Newprogramswillbeproposedfortheuseofthosefunds.NationalGriddoesnotagreethatitshould berequiredtoproposeablockbiddingprogram.TheTRCtestisthebesttestformeasuringcost-effectiveness.TheEvaluationAdvisoryGroupshouldstudywhetherchangesininputsshouldbeadopted.Problemswithprogramoverlapinthedownstateareaareexaggerated.AgreatdealofcooperationhastakenplacebetweenGridandLIPA,ConEdison,andNYSERDA.OnLong Island,theutilitiesparticipateinaLongIslandGreenHomesConsortiumwithNYSERDA.Sharingnon-participantdatarisksviolationoftheCommissionsprivacypolicies.CentralHudsonDevelopingenergyefficiencyisanimportantpriority.TheCommissionhastakenmanystepsinfurtheranceofthisgoal,andtheprogramsarenowatacrossroads.Continuityof fundingisessential.Butincreasedcooperationamongstakeholders,andnewstudiesof achievableefficiencypotentialneedtobeperformed.Staffsbasicrecommendationforcontinuityissound,butthecontinuousimprovementofprogramsneedstobeinformedbypotentialstudiesexaminingtechnical,economic,and APPENDIX5-16-achievabilityissues.Experiencehasshownthattheassumptionsunderlyingtheoriginalprogramtargetsinmanycaseshavebeenflawed,andthisneedstobecorrectedwithbetterstudies.Althoughchangesinlightingstandardswillneedtobeaccountedfor,lightingprogramsarebyfarthemostproductiveofsavingsandshouldbecontinuedatleastthrough2012.Withrespecttosectorequity,therearepolicyreasonstomaintainbalance,andtodedicatefundstosometypesoflower-performingprograms.Thosedecisions,however,needtoberecognizedinthemetricsbywhichprogramadministratorsareevaluated;otherwiseprogram administratorsareplacedintoanuntenableposition.Themechanismforcostrecoveryshouldnotberevised.ItwouldbedifficulttoeliminatetheoverlapbetweenutilitiesandNYSERDA.Bothacompetitiveapproachandacooperativeapproachhavemeritsandproblems,butacooperativeapproachispreferable.Thechiefbenefitofacompetitiveapproachisthatpoorperforming measuresandprogramswouldbeweededout;butthatprocessistime-consuming,andinthe meantimecustomersarepayingforthemistakes.Forcooperationtowork,utilitiesand NYSERDAwillneedtofindimprovedwaysofsharinginformation.Also,potentialstudieswill helpinsettingincentivelevelsandotherstepsneededtoenhancecooperation.Theshareholderincentivemechanismhassucceededininducingperformance.Negativeadjustmentshavenoclearpurpose,becausefailuretoreachtargetsdoesnodirectharm.Even so,CentralHudsondoesnotopposethepotentialfornegativeadjustments,ifsetreasonably, whichrequiresdetailedpotentialstudies.Settingincentivesproperlywillavoidthetypeof discussionsoverposthocadjustmentsthatwehaveseenwithrespecttothe2009-2011period.Staffscharacterizationofutilitybehavior,inthecontextofitsincentivesdiscussion,isinaccurateandservesnopurpose.Staffoftentakespositionsthatserveitsowninterests,asdo utilities.Ifutilitieswereaiminglow,onewouldexpectthattheirtargetswouldhavebeen achieved.Anyconflictthatmightexistwithrespecttotargetswouldbegreatlyamelioratedby theuseofpotentialstudiesandarevisedTRC.CooperationbetweenutilitiesandNYSERDA canbemadetoworkwithinanincentiveprogram.TheconfusionexperiencedduringthefirstthreeyearsofEEPSmayjustifyaposthocadjustmenttopenaltylevels,butthepotentialforfutureposthocadjustmentswillmakeitverydifficultforutilitiestoplan.Totheextentthat incentivesmaydriveutilitiestowardinvestingmoreinhigher-performingprograms,thatisa goodthing;totheextentthatmightdisruptportfoliobalance,andcompromiseotherpolicy concerns,thosepolicyconcernsneedtoberecognizedinthemetricssoutilitieswillhave incentivestopursuethem.Whiletheimpactofincentiveshasoccupiedsomeoftheutilitiestime,particularlyintheirinteractionwithStaff,utilitiesspendagreatdealoftimesharinginformationaboutprogramimprovementinforumsotherthantheIAG.Positiveincentivesshouldremaininplaceduring2012,whilepotentialstudiesareperformed.Tailoringincentivestouniqueutilitycharacteristicsmaybeappropriate.Central Hudsonhasout-performedallotherprogramadministrators,anditsachievementshouldberewarded.

APPENDIX5-17-MultipleIntervenorsStaffsrecommendationtoreauthorizethemajorityofprogramsisunreasonable.The15by15goalwasneversupportedinthefirstplace,andsubsequenteventshaveundermineditfurther.Itshouldbescaledbacksubstantially.ThegulfbetweenNewYorksenergypricesand averageU.S.priceshasnotimproved,nonewcapacityisneededinthenearfuture,andmarket developmentssuchaslowergaspriceshaveunderminedtherationaleforandfinancialmetricsforefficiencyprograms.EEPSmustbeconsideredinconjunctionwithSBC,RPSandotherprogramssupportedbyratepayers.Iftherecessioncausedunder-performanceofEEPS,the recessionalsomadecustomersmoresensitivetothesecharges.Ataminimum,allprograms shouldbereevaluatedunderacost-effectivenesstest.Annualchargesforlargecustomersshouldbecapped.Otherstateshavedonethis.Failuretodosowillcontributetolargebusinessesmovingoutofthestate.ElectricEEPSprogramcostsshouldbeallocatedtoclassesbasedonfundsdedicatedtoeachclass.InformationregardinginterclassequityhasnotbeenprovidedbyStaff,andcannotbe evaluatedbycommenters.AmortizationofEEPScostsovermultipleyearswouldincreasethetotalcostoftheprogram.LargecustomersshouldbeaccordedtheflexibilitytodirectallorsomeoftheirEEPSsurchargesintoself-directedefficiencyprograms.Notonlywouldthisensureanequitable distributionofsurchargecollections,butitwouldenableeachcustomertoaddressitsown uniqueefficiencyneeds,whichmightnotbeservedbyuniformprograms.Inthealternative,eachutilityshouldbedirectedtoimplementablockbiddingprogram,whichisbettersuitedtomeetingtheindividualneedsoflargecustomers.TheTRCtestneedstoberevised.Aspresentlyconstructed,itdoesnotaccountforthecostofcustomerincentives.Moreover,itreliesonhardtoquantifybenefitsthatmakethetest easiertopass.Finally,therearemanyprogramsandmeasurethatbarelypassthe1.0 threshold,meaningthatthereisnomarginforerrorintheCommissionsfindingofcost-effectiveness.Utilityshareholderincentivesshouldbeeliminated.UtilitiesshouldnotneedacostlyincentivetoperformataskassignedtothembytheCommission.Competitionamongprogramadministratorsforapprovalofprogramsisbeneficial,buttheapprovalofprogramsshouldbeperformedinawaythatminimizesdirectcompetitioninprogramimplementation.ThecurrentoverlapofresponsibilitybetweenNYSERDAandutilities isinefficient.CityofNewYorkGenerally,EEPSprogramsshouldbereauthorizedasrecommendedbyStaff.Alackoffundingcontinuitywoulddisruptprograms.Itisnotclear,though,whythecurrentfactorsinhibitingperformance,suchasthesluggisheconomy,willnotcontinuetoundermine APPENDIX5-18-performance.Moreanalysisneedstobeperformedoftheroleofprogramdesignindelayingachievementoftargets.AlargeamountofenergyefficiencypotentialremainsinNewYorkCity.ThispotentialcanbetappedbycooperativeeffortsbetweentheCityandEEPSprogramadministrators.Alackofclearinformationsharinghascausedconfusionamongcustomersandadministrators.TheIAGshouldestablishtworegionalsubcommittees,oneeachforupstateanddownstate,toallowforbettercoordination,andmoreprogramstargetedtotheneedsofthedemographicsandbuildingprofilesofdownstate,aswellastreatmentofthecomplexlandlord-tenantissuesthatexistdownstate.NYSERDAshouldincreaseitspresenceinNewYorkCity.Also,ConEdisonshouldberequiredtoproposeablockbiddingprogram.LightingmeasuresmustremainacentralcomponentofEEPS.OpportunitiesforefficientlightingintheCitysonemillionbuildingsremainverylarge.Theroleoflightingshouldbeexpended,notretracted.TheGreenLightNewYorkcentershouldbefunded.Also,theprocessfortakingnewstandardsintoaccount,proposedbyStaff,shouldbetransparentandinvolved opportunityforpubliccomment.Intheefforttomeetefficiencytargets,theimportanceofmarkettransformationshouldnotbeunderstated.Markettransformationeffortsshouldbeincreased.ThefueluserestrictionsonEEPSprogramsshouldberelaxedtosupportmoreoil-to-gasconversions.ThiswouldfurthertheCitysemissionreductionprograms.Fundingforlow-incomecustomersneedstobeequitable,andStaffsanalysisshouldberefinedand/orconfirmedfollowedbyacommitmentofmoreEEPSresourcestolow-incomecustomers.Eligibilityshouldbeexpandedtointerruptiblecustomers.Althoughthereasoningforexcludingthemattheoutsetwassound,multifamilyprogramsinparticularhavebeenimpededgreatlybytheineligibilityofinterruptiblecustomers.TheCityhasastronginterestinworking withIAGmembersandotherstodevelopthisproposal.EEPScostrecoveryshouldnotbeamortizedovermulti-yearperiods,primarilybecausethiswouldincreasethetotalcostsoftheprogram.EM&Veffortsneedtobecontinued,andacentralizeddatabaseshouldbemadeavailabletostakeholders.BenchmarkingeffortsmodeledaftertheCitysshouldbeusedasatemplatefor astatewideinitiative.Fundingforoutreachandmarketingeffortsshouldnotbereducedasprogrammature,butEM&Vmethodsshouldbeappliedtooutreachefforts.NationalAssociationofEnergyServiceCompanies(NAESCO)Thecurrentstructureofutilityincentivesproducescontinuouscontroversy.Itshouldbereplacedwithasimpleadministrativefeeandanopportunitytoearnareturnonequity.

APPENDIX5-19-MerecoordinationbetweenNYSERDAandutilitiesisnotsufficient,evenifitisattainable.Asingleconsolidatedprogramshouldbeofferedtocustomers.Theinsistenceonmeasuringcost-effectivenessbymeasure,ratherthanbyproject,hasimpairedtheimplementationofeffectiveprograms.ThemembershipoftheIAGshouldbeexpandedtoincludeotherstakeholders.Theeffectsofefficiencyonwholesalemarketsshouldbeconsideredincost-effectivenesstests.Staffreliesonastudyrelatedtodemandresponseprograms;energyefficiencyonthescaleofEEPShasdifferenteffectsthandemandresponseandcannotbeobviatedbyforward contractingandhedgingstrategies.ConsumerPowerAdvocatesSelf-directedprogramsbylargecustomersareunnecessary.Suchprogramswoulddrainrevenuefromthelargereffort.Thecostofanefficiencyprogramforalargecustomerislikelytobemuchhigherthanthesurchargepaidbythatcustomer.Utilityincentivesshouldbeeliminatedinthenearterm,andconsideredinthecontextofratemaking.Incentivesmustbecorrectedtoprovideforgreatercooperationbetween NYSERDAandutilities.Utilitiesarebusinessesandmustbeexpectedtopursuetheirown interests.Adelineationofresponsibility,withlargecustomersunderNYSERDAprogramsand smallercustomersunderutilityprograms,wouldbeeffective.NewYorkStateDepartmentofEnvironmentalConservation(DEC)OfficeofEnvironmentalJusticeLowincomefundingshouldbeincreasedto30%ofoverallfundingfortheresidentialsector.TheIAGshouldestablishasubcommitteetoevaluateenvironmentaljusticeconcernsintheEEPSprograms.Low-incomecustomersaremorelikelytoliveinrentalhousing,whichis underservedintheEEPSprograms;low-incomehouseholdsarealsomuchmorevulnerableto fluctuationsinenergyprices.GreenEnergyCollaborationProgram(GREENCO)Greencoisacollaborativeofmanystakeholdersconcernedwithenergyuseinhospitals.EEPSprogramsshouldbereauthorizedwithcorrespondingfundinglevelsandastrategyofcontinuousimprovement.TheGreencoinitiativeshouldbecomepartofthatimprovement.Hospitalsareenergy-intensive;thereareapproximately200inNewYork.Duetotheneeds facedbyhospitals,itisdifficulttofindfinancingforenergyefficiencyinvestments.AnEEPS programshouldbetailoredtotheneedsofhospitals,andshouldbeintegratedwithfinancing mechanismstoencourageparticipation.EEPSfundingcanbeleveragedwithprivatecapital.GreencointendstoworkwithStafftocreateaspecificproposal.Atpresent,thereisnoclearprocessforimprovementofprogramsorproposalofnewprograms.

APPENDIX5-20-BarrierstocooperationbetweenNYSERDAandutilitiesmustbeaddressed.Anewincentivemechanismspecificallydesignedforahospitalprogramshouldbedeveloped.Programadministratorsshouldalsobegrantedmoreflexibilitytoadjustprogramstomeetthespecific needsofahospitalprogram,astheneedsarise.Evaluationeffortsarecrucial.Hospitalboardsandfinancialinstitutionsarefarmorelikelytocommitcapitalresourcestoprogramsiftheyknowthatprojectionsarerealisticandperformancewillbeevaluated.NortheastEnergyEfficiencyPartnership(NEEP)TheCommissionshoulddirectutilitiesandNYSERDAtoparticipateinregionalprogramandpolicyefforts.Jointstudiescanavoidduplicativeefforts.Thisisparticularlytruewithrespecttonationaltrendslightchangesinlightingstandards.Coordinationshouldbeincreased,particularlywithNYSERDAsT&MDefforts.Utilitiesshouldbemoreinvolvedinadvancingcodesandstandards.

NewYorkshouldmaintainitsparticipationintheRegionalEM&Vforum.ForumprojectsareselectedwithreferencetoneedsidentifiedbyNewYorksCommission.NEEPhasbeenanactiveparticipantinNewYorksEvaluationAdvisoryGroup.ConservationServiceGroupTheoverallgoalsoftheEEPSprogramaresound,andprogramsshouldbecontinuedsubjecttoimprovement.Abruptchanges,evenminorones,canhavelargeimpactsoncontractorswhoimplementprograms.Hundredsofemployersacrossthestatedependonthe orderlycontinuationofprograms.TheadministrationofEEPShasbeenunnecessarilycomplexandburdensome.Agreatdealofproductivityissacrificedduetotheconfusionofmultipleadministratorsinthesame markets,narrowcost-effectivenesstests,fuelrestrictions,lackofasinglesourceforinformation,burdensomereporting,andlackofconvenientfinancing.Efficiencyprogramsshouldbecoordinatedonaregionalbasis,followingtheGovernorsregionaleconomicdevelopmentstructureforthestate.Goalsshouldnotbelowered.Considerationofgoalsshouldnotbethoughtofasanexerciseinaccuracy.TheTechnicalManualisflawed,andits90%net-to-grossratioisquestionable.Becausegoalsmightnotbemetusingcurrentassumptions,theyshouldnotbe reduced.ApplyingtheTRCtomeasuresisoverlyrestrictive.Itplacesahugeburdenoncontractors.Itshouldbechangedimmediately.Inthelongerterm,aTechnicalConferenceshouldbeconductedtoreformthetestitself.TheProgramAdministratorCostTestispreferred,supplementedwithaSocietalBenefittest.

APPENDIX5-21-Themarkettransformationapproachtoefficiencyisimportant.Itresultseventuallyinwidespreadsavingsachievedwithnopublicsupport.Higherlevelsforworkforcedevelopmentshouldbesupported.Technicalproficiencyisthegreatestsinglefactorinachievingtrueenergysavings.Also,thedeeperintotheenergymarketstrainingprogresses,themoremarketsaretransformed.Fundingforlow-incomeprogramsshouldbeincreased.TheSBCT&MDactivitiesneedtobeintegratedwithEEPSprograms,especiallyinthecontextofoutreach.WilldanEnergySolutionsContinuityofprogramsisessential.Continuousimprovementshouldbemadeinconsultationwithstakeholdersincludingcontractors.Itshouldalsofollowaclearprocesswithfasterapprovals.Third-partyprogramadministratorsshouldbeabletoproposeinnovative programs.PAsshouldhavetheflexibilitytoraiseincentivesasneeded.Ingeneral,PAsshould begivenbroadergoalsandbudgetsandmoreflexibilitytoimplementthem.TargetsforfutureyearsshouldnotattempttomakeupshortfallsfromthefirstyearsofEEPS.Utilityincentivesshouldbepositive-only.EliminatingnegativeincentiveswillsolvemostoftheissuesraisedbyStaff;butitneedstoberecognizedthatutilitiesarefor-profit companiesthatwillrespondtoincentives.Themechanismneedstobesimpleandstraightforward.ClearerlinesneedtobedrawnbetweenNYSERDAandutilityprograms.NYSERDAandutilitieshavebeenabletocooperateonindividualprograms;however,therearecustomersectorsmuchbettersuitedforexclusivetreatmentbyNYSERDA,suchaslargeretailerswith multiplelocationsthroughoutthestate.Dollarspermegawatthourshouldbetheprimarymetric.Budgetsforoutreachandmarketingshouldnotdeclineasprogramsmature.EfficiencyFirstNationalGridsEnhancedHomeSealingprograms(EHSIP)shouldnotbeterminated.Manyprogramissueshavebeenresolved.TheprogramanalysiscontainedintheWhitePaperdoesnotreflectrecentimprovementsinprogramadministration.FreeBPIcompliantenergyauditsavailablefromNYSERDA,LIPAandothersdeterhomeownersfromobtainingasecondEHSIPaudit,whichlimitsthenumberofpotentialparticipants.TheTechnicalManualisoutdatedandshouldnotbereliedonforprogramanalysis.

APPENDIX5-22-TheTRCtestignoresnumerousbenefitsofEHSIP,includingcorrectionofventingproblems,eliminatingdangerofgasandcarbonmonoxideleaks,andcreationoflocaljobs.Notallcontractorsperformequally,andtheprogramcouldbeimprovedsignificantlywithbettermonitoringofindividualcontractorperformance.TRCEngineersLowincomeprogramsneedtobeincreased,bothforthesakeofequityandtoreplacedecliningfederalfunds.Thestatehasdevelopedanexperiencedgreen-collarworkforce,andthedeclineinfederalfundingthreatenstostrandmanyoftheseworkers.Equitysuggestsfundinglowincomeprogramsat40%oftheresidentialallocation.Takingotherconcernsintoaccount,a25%levelmightbereasonable.Theaffordable multifamilycomponentofEEPSprogramsislikelytoseeanincreaseindemand.Lowincome projectstendtocostmore,notnecessarilybecausetheenergycomponentislesscost-effective, butbecauseahighernumberofhealthandsafetyimprovementsareinvolved.Anadderto recognizethisshouldbeincorporatedintotheTotalResourceCosttest.SplitincentivesshouldbedealtwithbyreferringtotheMPPprogramundertheSBCrules.Theserulesensuredthatbothownersandtenantsexperiencedreducedenergybills.TheTotalResourceCosttestneedstoincreasetheemissionfactor.$50/tonforacarbonfactorisconservative.ApplyingtheTRCatthemeasureleveliscounterproductive.TheprohibitionagainstlowincomebuildingsintheElectricReductioninMasterMeteredBuildingsprogramshouldberemoved.Ifnecessary,thiscouldbelimitedtobuildings heatingwithfossilfuels.FreeLightingCorp.Theeconomicdownturnhashadastrongeffectoncustomerparticipation,particularlyforsmallbusinesses.Incentivelevelsneedtobeincreasedtominimizefinancialriskforparticipatingcustomers.Thisisthesortofcommon-senseadjustmentthatneedstobemadeas programsadjusttoexperience.LongIslandJobswithJusticeNewBuffaloImpactCoalitionforEconomicJusticeCommonCause PartnershipforthePublicGoodEEPSiscurrentlyunderservinglow-and-mediumincomecustomers.Lowincomecustomershavemuchgreaterenergyefficiencyneedsthanothercustomers.Whole-houseprogramsarealsobeneficialforjobcreation.EEPSwouldalsobemademoreefficientifitwereadministeredentirelybyNYSERDA.

APPENDIX5-23-FacilitySolutionsGroupSmallbusinesseshavenotbeenadequatelytargetedbyefficiencyprograms,andtheylacktheresourcestoinitiateprojects.TherulesoftheSmallBusinessDirectInstallProgramneedtobesimplifiedforthesmallbusinessownertoallowgreaterparticipation.Thiscouldbedonethroughon-billfinancing,greaterincentivelevels,betterpromotion,orincreaseof customersize.SchoolFacilitiesManagementInstituteNYSAssociationforSuperintendentsofSchoolBuildingsandGroundsEnergyconsumptionisanimportantcomponentofstrappedschooldistrictbudgets.EEPSprogramsareavitalpartofastrategytocontrolcosts;EEPSprogramsshouldbe continued.

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