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Home My WebLink AboutSCG - So Cal Gas - Southern California Gas Company - 2010-01-19 Dept ID AD-16-002 Page 1 of 2 Meeting Date 1/19/2016 CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIL ACTION MEETING DATE: 1/19/2016 SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A Wilson, City Manager PREPARED BY: Ken Domer, Assistant City Manager Antonia Graham, Energy and Sustainability Projects Manager SUBJECT: Approve and authorize execution of the Third Amendment to the Agreement to Jointly Deliver the 2010-2012 Orange County Cities Energy Efficiency Partnership Program by and between Southern California Gas Company (SCG) and the City of Costa Mesa, the City of Fountain Valley, the City of Huntington Beach, the City of Westminster, and the City of Newport Beach Statement of Issue The City of Huntington Beach approved Resolution 2009-08 and entered into a Local Government Energy Action Partnership in 2009 The City subsequently replaced that agreement on January 19, 2010, with both Southern California Edison (SCE) and Southern California Gas (SCG) for the program period of 2010-2012, and subsequently approved first and second amendments through December 2015 On December 21, 2015 the City Council approved a Third Amendment with SCE and now is requested to consider a similar amendment with SCG Financial Impact Not applicable While there is no cost to the City by participating in the partnership, the City is eligible for additional monetary incentives for energy efficiency improvements Recommended Action A) Approve and authorize the Mayor and City Manager to execute the Third Amendment to the Agreement to Jointly Deliver the 2010-2012 Orange County Cities Energy Efficiency Partnership Program by and between Southern California Gas Company and the City of Costa Mesa, the City of Fountain Valley, the City of Huntington Beach, the City of Westminster, and the City of Newport Beach, and, B) Authorize the City Manager to execute any subsequent documents approved as to form by the City Attorney to advance, manage, or complete Energy Leader Partnership activities Alternative Action(s) Do not approve and direct staff how to proceed Analysis The Southern California Gas Company (SCG) has partnered with the Cities of Huntington Beach, Costa Mesa, Newport Beach,' Fountain Valley, and Westminster to administer the Orange County Cities Energy Partnership since 2009 The partnership framework provides enhanced incentives for energy saving projects in City facilities, technical assistance, marketing, education, and outreach to support Huntington Beach's sustainability and energy efforts in the community This includes xB -203- Item 8. - I Dept ID AD-16-002 Page 2 of 2 Meeting Date 1/19/2016 Incentives and rebates for the City's water distribution system (e g booster pumps, pump tests) and facilities The funds come from the Public Goods charge that SCG collects from Its ratepayers as required by the California Public Utilities Commission (CPUC) SCG administers these funds with CPUC oversight to increase energy efficiency and sustainability efforts in local communities (known as the Rolling Portfolio) The CPUC approved the extension of the Rolling Portfolio through the end of 2016 Future year approvals may be multi-year, which will lead to more efficiency in managing programs for local municipalities Over the course of the program the City has received over $1 million in incentive funding for projects that have included interior lighting upgrades, LED lighting retrofits, chiller upgrades, and HVAC retro-commissioning In the future, upgrades to the Peck Reservoir, Central Library are planned Additionally, SCG will test the water distribution system's pumps to determine if more efficiency can be found Environmental Status Not applicable Strategic Plan Goal Strengthen economic and financial sustainability Attachments) 1 Third Amendment to the Agreement to Jointly Deliver the 2010-2012 Orange County Cities Energy Efficiency Partnership Program by and between Southern California Gas Company and the City of Costa Mesa, the City of Fountain Valley, the City of Huntington Beach, the City of Westminster, and the City of Newport Beach Item 8. - 2 HB -204- THIRD AMENDMENT This THIRD AMENDMENT TO THE AGREEMENT TO JOINTLY DELIVER THE 2010-2012 ORANGE COUNTY CITIES ENERGY EFFICIENCY PARTNERSHIP PROGRAM (the "Agreement" or the "Program"), is effective as of January 1, 2016 ("Third Amendment Effective Date"), is entered into by and between SOUTHERN CALIFORNIA GAS COMPANY ("SCG" or "Utility") AND THE CITY OF COSTA MESA, THE CITY OF FOUNTAIN VALLEY, THE CITY OF HUNTINGTON BEACH, THE CITY OF WESTMINSTER AND THE CITY OF NEWPORT BEACH(the`-Cities") SCG and the CITIES are sometimes referred to herein individually as a "Party" or collectively as the "Parties" Initially capitalized terms used but not defined herein shall have the meaning ascribed to them in the Agreement RECITALS WHEREAS, the Parties previously executed the Agreement effective January 1, 2010 and subsequently amended the Agreement to extend its term through December 31, 2014 in accordance with the applicable decisions of the California Public Utilities Commission, WHEREAS, on March 26,2014,the Utility submitted its application ("2015 Application") for the implementation of energy efficiency programs to be delivered to California utility customers for the year 2015, which includes the continuation of the Orange County Cities Partnership Program through 2015 ("2015 Program") WHEREAS, on October 24, 2014, the Commission issued a Final Decision (D 14-10-046) approving the continuation of the Energy Efficiency Programs through 2015 (the "2015 Program"), and the Parties wish to extend the Agreement through 2015 under the terms and conditions set forth in the Agreement, WHEREAS, on October 28, 2015, the Commission issued Decision D 15-10-028 approving the continuation of the Energy Efficiency Partnership Programs, including continuation of the Orange County Cities Partnership Program for 2016 and beyond, and WHEREAS, the Parties desire to amend the Agreement, (1)to extend its term through December 31, 2018, (2) to provide an authorized budget for the 2016 Program, and (3) to otherwise update the Agreement as required to reflect the extended 2016-2018 Program cycle NOW THEREFORE, for valuable consideration, the receipt and sufficiency of which is hereby acknowledged,the Parties agree as follows I Except as provided herein, and to the extent applicable, any reference in the Agreement, as amended, to the "2010-2012 Program" shall hereby include the 2013-2014 Program, the 2015 Program and shall also hereby include the 2016 Program 2 Section 11 of the Agreement is hereby deleted in its entirety and replaced with the following "l l END DATE FOR PROGRAM AND ADMINISTRATIVE ACTIVITIES Unless this Agreement is terminated pursuant to Section 25 (TERM AND TERMINATION), or unless otherwise agreed to by the Parties or so ordered by the I Commission, the Parties shall complete all Program Administrative activities (as defined in the Agreement) and all reporting requirements by no later than March 31, 2019, and all Direct Implementation and Marketing & Outreach activities by no later than December 31, 2018 " 3 Section 12 of the Agreement is hereby deleted in its entirety and replaced with the followmg 12.FINAL INVOICES Each City must submit final invoices to Utility no later than March 31,2019" 4 Section 25.1 of the Agreement is hereby deleted in its entirety and replaced with the followmg "25.1 TERM This Agreement shall be effective as of the Effective Date Subject to Section 37, the Agreement shall continue in effect until March 31, 2019 unless otherwise terminated in accordance with the provisions of Section 25 2 or 30 of the Agreement 5 Section 26 of the Agreement is hereby deleted in its entirety and replaced with the following "26.WRITTEN NOTICES Any written notice, demand or request required or authorized in connection with this Agreement, shall be deemed properly given if delivered in person or sent by nationally recognized overnight courier, or first class mail, postage prepaid, to the address specified below, or to another address specified in writing by a Party as follows THE ORANGE COUNTY CITIES- City of Costa Mesa City of Newport Beach Daniel Baker Ins Lee Assistant to CEO Senior Civil Engineer 77 Fair Drive 100 Civic Center Drive Costa Mesa, CA 92648 Newport Beach, CA 92660 Tel. (714) 754-5156 Tel- (949) 644-3323 City of Fountain Valley City of Westminster Stacy DeLong Soroosh Rahban Assistant Engineer Building Official 10200 Slater Avenue, 8200 Westminster Blvd Fountain Valley, CA 92708 Westminster, CA 92683 Tel. (714) 593-4443 Tel. (714) 898-3311, ext 250 City of Huntington Beach Energy& Sustainability Projects Manager 2000 Main Street Huntington Beach, CA 92648 Tel (714) 536-5537 2 SCG Southern California Gas Company Ann Teall Energy Programs Advisor 555 W Fifth Street,GT20B4 Los Angeles, CA 90013-1046 Notices shall be deemed received (a) if personally or hand-delivered, upon the date of delivery to the address of the person to receive such notice if delivered before 5:00 p m PST(or PDT, as applicable), or otherwise on the Business Day following personal delivery, (b) if mailed, three (3) Business Days after the date the notice is postmarked; or (c) if by overnight courier, on the Business Day following delivery to the overnight courier within the time limits set by that courier for next-day delivery" 6 This Third Amendment may be executed in one or more counterparts, each of which shall be deemed to be an original,but all of which together shall be deemed to be one and the same instrument 7 Exhibit B to the Agreement is hereby deleted in its entirety and replaced with the version of Exhibit B attached to this Third Amendment, which attached version is incorporated herein by reference and made a part of the Agreement General From and after the Second Amendment Effective Date, any reference to the Agreement contained in any notice,request, certificate or other instrument, document or agreement shall be deemed to mean the Agreement, as amended by any prior amendments to the Agreement, and this Third Amendment In the event of any conflict between the Agreement, as amended, and this Third Amendment,this Third Amendment shall prevail All remaining provisions of the Agreement shall remain unchanged and in full force and effect Each party is fully responsible for ensuring that the person signing this Third Amendment on that party's behalf has the requisite legal authority to do so. 3 [SIGNATURES FOLLOW] IN WITNESS WHEREOF,the Parties hereto have caused this Third Amendment to be executed by their duly authorized representatives as of the Third Amendment Effective Date THE CITIES CITY OF COSTA MESA By By Name Stephen Mensmger Name Thomas R. Hatch Title Mayor Title: CEO Date Date 4 CITY OF FOUNTAIN VALLEY By Name Bob Hall Title City Manager Date 5 CITY OF HUNTINGTON BEACH By. By Name: i m K a t a p o d i s Name ied Wilson Title Mayor Title City Manager Date- January 19 , 2016 Date January 19 , 2016 APPROVED AS TO FORW By V1 6 CITY OF NEWPORT BEACH. By Name: Dave Kiff Title City Manager Date: APPROVED AS TO FORM: City Attorney Date ATTEST. Leilani I Brown, City Clerk 7 CITY OF WESTNHNSTER By Name Eddie Manfro Title City Manager Date 8 SCG: SOUTHERN CALIFORNIA GAS COMPANY: By: y , Name: Daniel J. Rendler Title: Director, Customer Programs and Assistance Date: r EXHIBIT B 2013-18 SCG Orange County Cities Partnership Goals and Budget 2013-2018 Energy Savings Gross Therm 2013-2015 2016 2017 2018 6 Year Total 120,000 40,000 40,000 40,000 SCG Therm Therm Therm Therm 240,000 Therm Other non-resource goals are contained in the SCG PIP in Exhibit A 2013-2018 SCG OC Cities Partnership 2013-2018 Partnership Total Non-Incentive Budget $886,750 SCG Incentive From SCG Core Programs (1) $240,000 SCG Administrative Other $339,619 SCG Administrative Overhead $42,225 Total Utility Authorized Budget $3181,844 SCG Authorized Budget OC Cities Partner Authorized Budget $504,906 2013-18 Total Non-incentive Program Budget $886,750 Projected Allocations for OC Cities Authorized Budget $504,906 2013-2015 2016 2017 2018 Administration $30,000 $10,000 $10,000 $10,000 Marketing&Outreach $21,000 $7,000 $7,000 $7,000 Direct Implementation $201,453 $67,151 $67,151 $67,151 Note: Incentive is a part of SCG Core Program's Incentive Budget_ The incentive level is$1 00 per therm for calculated measures Incentives for deemed measures are in accordance with the incentive levels for the applicable SCG Core Programs 10 City of Huntington Beach 20oo Main Street e Huntington Beach, CA 92648 (714) 536-5227 e www.huntingtonbeachca.gov 77 1909;P� Office of the City Clerk Joan L. Flynn, City Clerk January 28, 2016 Southern California Gas Company ATTN Ann Teall, Energy Programs Advisor 555 W Fifth Street, GT20B4 Los Angeles, CA 90013-1046 Dear Ms Teall Enclosed is the original of the "Third Amendment" to the Agreement to Jointly deliver the 2010-2012 Orange County Cities Energy Efficiency Partnership Program Upon complete execution, please return a copy to us Please mail the document to Joan L Flynn City Clerk 2000 Main Street Huntington Beach CA 92648 Feel free to contact me if there are any questions or concerns at (714) 536-5404 Thank you very much for your assistance Sincerely, Joan L Flynn, CIVIC City Clerk JF pe Enclosure Sister Cities Anjo,Japan ® Wartakere,New Zealand i Dept. ID PW 14-070 Page 1 of 2 Meeting Date:2/2/2015 x CITY OIL HUNTINGTON BEACH r .. REQUEST FOR. CITY COUNCIL ACTION MEETING DATE: 2/2/2015 SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Travis K. Hopkins, PE, Director of Public Works SUBJECT: Approve and authorize execution of the Second Amendment to the Agreement to Jointly Deliver the 2010-2012 Orange County Energy Leader Partnership Program with Southern California Edison (SCE) and Southern California Gas (SCG) Statement of Issue: The City of Huntington Beach approved Resolution 2009-09 and entered into a Local Government Energy Action partnership in 2009. The City subsequently replaced that agreement on January 19, 2010, with both Southern California Edison (SCE) and Southern California Gas Company (SCG) for Program Year 2010-2012 and approved first amendments to the agreements for program years 2013-2014. The second amendments will continue the program through 2015. Financial Impact: Not applicable. Recommended Action: A) Approve and authorize the Mayor and City Manager to execute the "Second Amendment" to the Agreement to Jointly Deliver the 2010-2012 Orange County Energy Leader Partnership Program with Southern California Edison Company; and, B) Approve and authorize the Mayor and City Manager to execute the "Second Amendment" to the Agreement to Jointly Deliver the 2010-2012 Orange County Energy Leader Partnership Program with Southern California Gas Company and adjacent Orange County cities; and, C) Authorize the City Manager to execute any subsequent documents approved as to form by the City Attorney necessary to advance, manage or complete Energy Leader Partnership activities. Alternative Action(s): Do not approve the amendments and instruct staff on how to proceed. Analysis: SCE and SCG partnered with Huntington Beach and other adjacent Orange County Cities in 2010 through 2012 to implement a local government energy efficiency partnership. The partnership framework provides enhanced incentives for energy saving projects in City facilities, technical assistance, marketing, education and outreach funding to support Huntington Beach's energy and sustainability efforts in the community. ,Sy,5T,r- j 2-2 y'3 �' xB -63- Item 3. - I Dept. ID PW 14-070 Page 2 of 2 Meeting Date:2/2/2015 The funds are Public Goods charge funds that SCE and SCG are required by the Public Utilities Commission (PUC) to collect. SCE administers these funds with PUC oversight to increase energy efficiency, eliminating the need to build new power plants. This contract amendment will extend the effectiveness of existing and planned Capital Improvement Projects that increase energy efficiency. The PUC approved extending this program through 2014 and subsequent amendments to the original agreements were approved in 2013. The PUC recently extended the program through 2015. Over the course of the program, the City has received nearly $1 million in incentive funding for projects including interior lighting upgrades, LED lighting retrofits, chiller upgrades and City Hall HVAC retro-commissioning. Environmental Status: Not applicable. Public Works Commission Action: Not applicable. Strategic Plan Goal: Improve the City's infrastructure Attachments : 1. Second Amendment to the Agreement to Jointly Deliver the 2010-2012 Orange County Energy Leader Partnership Program with Southern California Edison Company. 2. Second Amendment to the Agreement to Jointly Deliver the 2010-2012 Orange County Energy Leader Partnership Program with Southern California Gas Company and adjacent Orange County cities. Item 3. - 2 HB -64- ATTAC H M E N T #2 SECOND AMENDMENT THIS SECOND AMENDMENT ("SECOND AMENDMENT") TO THE AGREEMENT TO JOINTLY DELIVER THE 2010-2012 ORANGE COUNTY CITIES ENERGY EFFICIENCY PARTNERSHIP PROGRAM dated January 1, 2010 (the"Agreement"or the"Program") is effective as of January 1, 2015 (the "Second Amendment Effective Date")as defined below by and among SOUTHERN CALIFORNIA GAS COMPANY ("SCG") AND THE CITY OF COSTA MESA, THE CITY OF FOUNTAIN VALLEY, THE CITY OF HUNTINGTON BEACH, THE CITY OF WESTMINSTER and THE CITY OF NEWPORT BEACH (the "Cities"). Terms not otherwise defined herein shall have the meaning ascribed to them in the Agreement. SCG and the Cities may be referred to herein individually as a "Party"and collectively as the"Parties." RECITALS WHEREAS, SCG and the Cities previously executed the Agreement effective January 1, 2010 and subsequently amended the Agreement to extend its term through December 31, 2014 in accordance with the applicable decisions of the California Public Utilities Commission; WHEREAS, on March 26, 2014,the Utility submitted its application("2015 Application")for the implementation of energy efficiency programs to be delivered to California utility customers for the years 2015, which includes the continuation of the Orange County Cities Partnership Program through 2015 ("2015 Program"); WHEREAS, on October 24, 2014, the Commission issued a Final Decision (D.14-10-046) approving the continuation of the Energy Efficiency Programs through 2015 (the "2015 Program"), and the Parties wish to extend the Agreement through 2015 under the terms and conditions set forth in the Agreement; and WHEREAS, the Parties desire to further amend the Agreement as necessary to provide an authorized budget for the 2015 Program and to update the Agreement as required to reflect the extended 2015 Program cycle. NOW THEREFORE, for valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows: 1. Effective Date and Conditions Precedent to Effectiveness: The"Second Amendment Effective Date" shall be the date by which all of the following conditions precedent have been met: a. All Parties have signed this Second Amendment; and b. The Commission has issued a Final Decision approving the Utility's respective 2015 Program as filed, or in a form acceptable to the Utility in its sole discretion. 2. Except as provided herein, and to the extent applicable, any reference in the Agreement to the"2010- 2012 Program" shall hereby include both the 2013-2014 Program and the 2015 Program. Second Amendment 1 of-10 3. Section 1 I of the Agreement is hereby deleted in its entirety and replaced with the following: 11. END DATE FOR PROGRAM AND ADMINISTRATIVE ACTIVITIES Unless this Agreement is terminated pursuant to Section 25 (TERM AND TERMINATION), or unless otherwise agreed to by the Parties or so ordered by the Commission, the Parties shall complete all Program Administrative activities (as defined in the PIP) and all reporting requirements by no later than March 31, 2016, and all Direct Implementation and Marketing & Outreach activities by no later than December 31,2015. 4. Section 12 of the Agreement is hereby deleted in its entirety and replaced with the following: 12. FINAL INVOICES Each City must submit final invoices to SCG no later than March 31, 2016. 5. Section 25.1 of the Agreement is hereby deleted in its entirety and replaced with the following: 25.1 Term. This Agreement shall be effective as of the Effective Date. Subject to Section 37, the Agreement shall continue in effect until June 30, 2016 unless otherwise terminated in accordance with the provisions of Section 25.2 or 30 of the Agreement. 6. Section 26 of the Agreement is hereby deleted in its entirety and replaced with the following: 26. WRITTEN NOTICES Any written notice, demand or request required or authorized in connection with this Agreement, shall be deemed properly given if delivered in person or sent by facsimile, nationally recognized overnight courier, or first class mail, postage prepaid, to the address specified below, or to another address specified in writing by a Party as follows: The OC Cities: SCG: City of Costa Mesa Southern California Gas Company Daniel Baker Ann Teall,Program Advisor 77 Fair Drive 555 W. Fifth Street, GT20134 Costa Mesa, CA 92648 Los Angeles, CA 90013 Tel: (714) 754-5156 Tel: (213)244-5843 Email: dbaker(cr�,ci.costa-mesa.ca.Lis Email: ateall@semprautilities.com City of Fountain Valley Matt Mogensen, Management Analyst 10200 Slater Ave. Fountain Valley, CA 92708 Tel: (714) 593-4412 Email: Matt.Mogensen@fountainvalley.org Second Amendment 2 of 10 City of Huntington Beach Ken Dills 2000 Main Street Huntington Beach, CA 92648 Tel: (714) 375-5055 Email: kdills@surfcity-hb.org City of Newport Beach Iris Lee, Senior Civil Engineer 100 Civic Center Drive Newport Beach, CA 92660 Tel: (949) 644-3323 Email: lLee@iiewportbeachca.gov City of Westminster Soroosh Rahbari, Building Official 8200 Westminster Blvd. Westminster, CA 92683 Tel: (714) 898-3311, ext. 250 Email: sorooshr@ci.westminster.ca.us Notices shall be deemed received (a) if personally or hand-delivered, upon the date of delivery to the address of the person to receive such notice if delivered before 5:00 p.m. PST(or PDT, as applicable), or otherwise on the Business Day following personal delivery; (b) if mailed, three (3) Business Days after the date the notice is postmarked; (c) if by facsimile, upon electronic confirmation of transmission, followed by telephone notification of transmission by the noticing Party; or(d) if by overnight courier, on the Business Day following delivery to the overnight courier within the time limits set by that courier for next-day delivery. 7. This Second Amendment may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall be deemed to be one and the same instrument. 8. Exhibit B (2010-12 ORANGE COUNTY CITIES PARTNERSHIP PROGRAM GOALS AND BUDGET) of the Agreement are hereby deleted in their entirety and replaced with the version of Exhibit B (2013-2015 ORANGE COUNTY CITIES PARTNERSHIP PROGRAM GOALS AND BUDGET) attached to this Second Amendment, which attached version is incorporated herein by reference and made a part of the Agreement. 9. General. From and after the Second Amendment Effective Date, any reference to the Agreement contained in any notice, request, certificate or other instrument, document or agreement shall be deemed to mean the Agreement, as amended by this Second Amendment. In the event of any conflict between the Agreement, as amended, and this Second Amendment, this Second Amendment shall prevail. All remaining provisions of the Agreement shall remain unchanged and in full force and effect. Each party is fully responsible for ensuring that the person signing this Second Amendment on that party's behalf has the requisite legal authority to do so. Second Amendment 3 of 10 [SIGNATURES FOLLOW] IN WITNESS WHEREOF, the Parties hereto have caused this First Amendment to be executed by their duly authorized representatives as of the Second Amendment Effective Date. The Cities: CITY OF COSTA MESA By: By: Name Printed: Eric Bever Name Printed: Thomas R.hatch Title: Mayor Title: CEO Date: Date: Second Amendment 4 of 10 CITY OF FOUNTAIN VALLEY By: Name Printed: Raymond H.Kromer Title: City Manager Date: Second Amendment 5 of 10 CITY OF HUNTINGTON BEACH By: By: Name Printed. Oi 11 y Nam*rinted: Wilson Title: Mayor Title: Cit Manager Date: - '/J Date: APPROVED AS TO FORM Michael Gates,City Attorney Second Amendment 6 of 10 CITE'OF NEWPORT BEACH By: Name Printed: Dave Kiff Title: City Manager Date: Second Amendment 7 of 10 CTI'Y OF WESTMINSTER By: Name Printed: Mitch Waller Title: City Manager Date: Second Amendment 8 of 10 SCG: SOUTHERN CALIFORNIA GAS COMPANY By: Name Printed: Daniel Rendler Title: Director,Customer Programs and Assistance Date: Second Amendment 9 of 10 EXHIBIT B 2013-15 Orange County Cities Partnership Program Goals and Budget 2013-2015 Energy Savings(Gross Therm) 2013 2014 2015 3-Year Total SCG 40,000 Therm 40,000 Therm 40,000 Therm 120,000 Therm Other non-resource goals are contained in the SCG PIP in Exhibit A. SCG 2013-2015 OC Cities Partnership Total Non-Incentive Budget $425,641 SCG Authorized Budget 2013-2014 2015 2013-2015 (Previous) Total Budget SCG Administrative Other $90,687 $62,233 $152,920 SCG Administrative Overhead $12,949 $7,319 $20,268 Total Utility Authorized Budget $103,636 $69,552 $173,188 OC Cities Authorized Budget $168,302 $84,151 $252,453 2013-15 Total Non-incentive Program Budget $271,938 $153,703 $425,641 Projected Allocations for OC Cities Authorized Budget $252,453 2013 2014 2015 Administration $10,000 $10,000 $10,000 Marketing&Outreach $7,000 $7,000 $7,000 Direct Implementation $67,151 $67,151 $67,151 Note: Incentive is a part of SCG Core Program's Incentive Budget. The incentive level is$1.00 per therm for calculated measures or 80%of the equipment cost,whichever is the lesser of the two. Incentives for deemed measures are in accordance with the incentive levels for the applicable SCG Core Programs. Second Amendment 10 of 10 _ City Of Huntington Beach . h � 2000 Main Street s Huntington Beach, CA 92648 (714) 536-5227 e www.huntingtonbeachca.gov FB' a Office of the City Clerk 7/ 19 09 ® Joan L. Flynn, City Clerk February 4, 2015 Southern California Gas Company Ann Teall, Program Advisor 555 W. Fifth Street, GT20134 Los Angeles, CA 90013 Dear Ms. Teall: Enclosed for your records is a copy of the "Second Amendment" to the Agreement to Jointly Deliver the 2010-20112 Orange County Cities Energy Efficiency Partnership Program. Sincerely, Joan L. Flynn, CIVIC City Clerk JF:pe Enclosure Sister Cities: Anjo,Japan 0 Waitakere,New Zealand �j Dept. ID AD-13-008 Page 1 of 2 Meeting Date:5/6/2013 CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIL ACTION MEETING DATE: 5/6/2013 SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Bob Hall, Assistant City Manager SUBJECT: Approve and authorize execution of the First Amendment to the Agreement to Jointly Deliver the 2010-2012 Orange County Energy Leader Partnership Program with Southern California Edison and Southern California Gas Statement of Issue: The City of Huntington Beach approved Resolution 2009-09 and entered into a Local Government Energy Action partnership in 2009. The City of Huntington Beach subsequently replaced that agreement on January 19, 2010, with both Southern California Edison and Southern California Gas Company for the Program Years 2010-2012. These first amendments extend the existing contract through program years 2013 and 2014. Financial Impact: Not Applicable Recommended Action: A) Approve and authorize Mayor and City Manager to execute the"First Amendment" to the Agreement to Jointly Deliver the 2010-2012 Orange County Energy Leader Partnership Program with Southern California Edison Company; and, B) Approve and authorize Mayor and City Manager to execute the "First Amendment" to the Agreement to Jointly Deliver the 2010-2012 Orange County Cities Energy Efficiency Partnership Program with Southern California Gas Company and other adjacent Orange County cities; and, C) Authorize City Manager to execute any subsequent documents approved as to form by the City Attorney necessary to advance, manage or complete Energy Leader Partnership activities. Alternative Action(s): Do not approve the agreement and advise staff on how to proceed. V 3 Item 9. - I HB -234- Dept. ID AD-13-008 Page 2 of 2 Meeting Date:5/6/2013 Analysis: SCE and SCG partnered with Huntington Beach and other adjacent Orange County cities in 2010 through 2012 to implement a local government energy efficiency partnership. The Public Utilities Commission approved extending this program through 2014 and this amendment is necessary to continue the program. This program increases energy efficiency in both government and community-wide facilities. The Public Utilities Commission requires the collection of public goods charge funds and then tasks the utilities to administer these funds to increase energy efficiency in their territories. In the 2010-2012 program period, the city has received a total of$398,815 in incentive funding from SCE for interior lighting upgrades ($89,472), LED lighting upgrades ($22,833), chiller upgrades ($152,371), retro-commissioning ($121,504), data center virtualization and optimization ($12,635). So Cal Gas has provided $35,887 in incentives for natural gas savings in retro-commissioning at city facilities and works with the city's utility department to ensure the efficiency and effectiveness of the city's natural gas fired water pumps. In addition, both utility partners have supported community outreach efforts to save energy by participating at the annual Green Expo on Pier Plaza and other city efforts to keep HB businesses competitive by reducing utility costs and environmental impacts. The city's planned street light upgrade projects are projecting an additional $504,000 from this contract that will defray the cost of the LED street light upgrades and improve HB's infrastructure through energy efficiency projects. Environmental Status: Not applicable Strategic Plan Goal: Improve long-term financial sustainability Attachment(s): 0 First Amendment to the Agreement to Jointly Deliver the 2010-2012 Orange County Energy Leader Partnership program with Southern California Edison Company 2. First Amendment to the Agreement to Jointly Deliver the 2010-2012 Orange County Cities Energy Efficiency Partnership Program with Southern California Gas Company HB -235- Item 9. - 2 ATTAC H M E N T #2 FIRST AMENDMENT THIS FIRST AMENDMENT ("FIRST AMENDMENT") TO THE AGREEMENT TO JOINTLY DELIVER THE 2010-2012 ORANGE COUNTY CITIES ENERGY EFFICIENCY PARTNERSHIP. PROGRAM dated January 1,2010 (the "Agreement" or the "2010-2012 Program") is effective as of the First Amendment Effective Date (as defined below) by and among SOUTHERN CALIFORNIA GAS COMPANY ("SCG") AND THE CITY OF COSTA MESA, THE CITY.OF FOUNTAIN VALLEY, THE CITY OF HUNTINGTON BEACH, THE CITY OF WESTMINSTER '(the "Cities") and THE CITY OF NEWPORT BEACH. Terms not otherwise defined herein shall have the meaning ascribed to them in the Agreement: SCG and the Cities may be referred to herein individually. as a "Party" and collectively as the "Parties." RECITALS WHEREAS, SCG and the Cities previously executed the Agreement effective January 1, 2010; WHEREAS, SCG and the Cities wish to add the City of Newport Beach ("Newport Beach") as a party to the Agreement and include Newport Beach within in the defined terms of the Parties and the Cities; WHEREAS, Newport Beach agrees to be bound by all the terms and' conditions of the Agreement; and WHEREAS, the Parties desire to enter into this Amendment to add Newport Beach to the Program. WHEREAS, on May 18, 2012, the Commission issued a Decision Providing Guidance on 2013- 2014 Energy Efficiency Portfolios and 2012 Marketing, Education, and Outreach ("Final Guidance Decision") guiding the Utility to continue the 2010-2012 Program through a two year 2013-2014 transition period(hereinafter referred to as the"2013-2014 Program"); WHEREAS, on July 2, 2012, the Utility submitted its application ("2013-2014 Application") for the implementation of energy efficiency programs to be delivered to California utility customers for the years 2013 through 2014,which included the 2013-2014 Program; WHEREAS, on, November 15, 2012, the Commission issued a Final Decision approving the 2013-2014 Application as submitted ("Final Decision"), thereby approving continuation of energy efficiency programs, which includes the 2013-2014 Program, and the Parties desire to extend the Agreement through 2014 under the terms and conditions set forth in the Agreement, except as otherwise provided in this First Amendment; and WHEREAS, the Parties desire to further amend the Agreement as necessary to provide an authorized budget for the 2013-2014 Program and to update the Agreement as required to reflect the extended 2013-2014 Program cycle. NOW THEREFORE, for valuable consideration, the receipt and sufficiency of which is hereby. acknowledged,the Parties agree as follows: 1 First Amendment s 1. Newport Beach is hereby added as a Parry and an additional City to the Agreement and is hereby subject to all terms and conditions of the Agreement as of the First Amendment Effective Date,as defined in Section 2 below. 2. Effective Date& Conditions Precedent to Effectiveness: The`.`First Amendment Effective Date" shall be the date by which all of the following conditions precedent have been met: a. All Parties have signed this First Amendment; and b. The Commission has issued a Final Decision approving the Utility's respective 2013-. 2014 Application as filed, or in a form-acceptable to the Utility in its sole discretion. 3. Except as provided herein, and to the extent applicable, any reference in the Agreement to the"2010- 2012 Program" shall hereby include both the 2010-2012 Program and the 2013-2014 Program. 4. Section 1.15 of the Agreement is hereby deleted in its entirety and replaced with the following: 1.15 PIP or Program Implementation Plan: The most recent Commission decision,approved and publicly available plan for implementing the Program in each Utility's service territory 5. Section 11 of the Agreement is hereby deleted in its entirety and replaced with the following: 11. END DATE FOR PROGRAM AND ADMINISTRATIVE ACTIVITIES Unless this Agreement is terminated pursuant to Section 25 below, or unless otherwise agreed to by the Parties or so ordered by the Commission, the Parties shall complete all Program Administrative activities (as defined in the PIP) and all reporting requirements by no later than March 31, 2015, and all Direct Implementation and Marketing & Outreach activities by no later than December 31, 2014. 6. Section 12 of the Agreement is hereby deleted in its entirety and replaced with the following: 12. FINAL INVOICES Each City must submit final invoices to SCG no later than March 31; 2015. 7. Section 25.1 of the Agreement is hereby deleted in its entirety and replaced with the following: 25.1 Term. This Agreement shall be effective as of the Effective Date. Subject to Section 37, the Agreement shall continue in effect until June 30, 2015 unless otherwise terminated in accordance with the provisions of Section 25.2 or 30 of the Agreement. 8. Section 26 of the Agreement is hereby deleted in its entirety and replaced with the following: 26. WRITTEN NOTICES Any written notice, demand or request required or authorized in connection with this Agreement, shall be deemed_properly given if delivered in person or sent by facsimile, nationally recognized overnight courier, or first class mail, postage prepaid, to the address specified below, or to another address specified in writing by a Party as follows: 2 First Amendment The OC Cities: SCG: City of Costa Mesa Southern California Gas Company Daniel Baker Ann Teall,Program Advisor 77 Fair Drive 555 W. Fifth Street, GT20134 Costa Mesa, CA 92648 Los Angeles, CA 90013 Tel: (714) 754-5156 Tel: (213)244-5843 Email: dbaker(?ci.costa-mesa.ca.us Email: ateallgsemprautilities.com City of Fountain Valley Matt Mogensen,Management Analyst 10200 Slater Ave. Fountain Valley, CA 92708 Tel: (714) 593-4412 Email: Matt.Mo ensena,fountainvalley.org City of Huntington Beach Aaron Klemm 2000 Main Street Huntington Beach, CA 92648 Tel: (714) 536-5537 Email: Aaron.Klemmgsurfcity-hb.org City of Newport Beach Iris Lee, Senior Civil Engineer 3300 Newport Beach Blvd. Newport Beach, CA 92663 Tel: (949)644-3323 Email: ILee ,newportbeachca.gov City of Westminster Soroosh Rahbari,Building Official 8200 Westminster Blvd. Westminster, CA 92683 Tel: (714) 898-3311, ext. 250 Email: sorooshrgci.westminster.ca.us Notices shall be deemed received (a) if personally or hand-delivered, upon the date of delivery to the address of the person to receive such notice if delivered before 5:00 p.m. PST(or PDT, as applicable), or otherwise on the Business Day following personal delivery; (b) if mailed, three (3) Business Days after the date the notice is postmarked; (c) if by facsimile, upon electronic confirmation of transmission, followed by telephone notification of transmission by the noticing Party; or(d) if by overnight courier, on the Business Day following delivery to the overnight courier within the time limits set by that courier for next-day delivery. 9. This First Amendment may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall be deemed to be one and the same instrument. 10. Exhibit A (SOUTHERN CALIFORNIA GAS COMPANY PROGRAM IMPLEMENTATION PLAN) and Exhibit B (SOUTHERN CALIFORNIA GAS COMPANY 2010-12 GOALS & 3 First Amendment BUDGET FOR OC CITIES) attached to this First Amendment, which attached versions are incorporated herein by reference and made a part of the Agreement. 11. General. From and after the First Amendment Effective Date, any reference to the Agreement contained in any notice, request, certificate or other instrument, document or agreement shall be deemed to mean the Agreement, as amended by this First Amendment. In the event of any conflict between the Agreement and this First Amendment, this First Amendment shall prevail. All remaining provisions of the Agreement shall remain unchanged and in full force and effect. Each party is fully responsible for ensuring that the person signing this First Amendment on that party's behalf has the requisite legal authority to do so. [SIGNATURES FOLLOW ON NEXT PAGE] _ 4 First Amendment IN WITNESS WHEREOF, the Parties hereto have caused this First Amendment to be executed by their duly authorized representatives as of the First Amendment Effective Date. The Cities: CITY OF COSTA MESA Name: Eric Bever Name: Thomas R.Hatch Title: Mayor Title: CEO Date: Date: CITY OF FOUNTAIN VALLEY Name: Raymond H.Kromer Title: City Manager Date: CITY OF HUNTINGTON BEACH Name: Connie Boardman Name: Fred Wilson Title: Mayor Title: City Manager Dater d Date: APPROVED` A TO FORM: c — �0� C-I y Attorn y 5 First Amendment CITY OF NEWPORT BEACH CITY OF WESTMINSTER Name: Dave Kiff Name: Mitch Waller Title: City Manager Title: City Manager Date: Date: 6 First Amendment SCG: SOUTHERN CALIFORNIA GAS COMPANY By: Namee,P inted: Gillian Wright Title: irector,Customer Programs Da �� ,2013 7 First Amendment 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan 1. Program Name: Local Government Partnerships Program ID: Various Program Type: Local Government Partnership Southern California Gas Company's (SoCalGas) Local Government Partnership Programs far the 2013-2014 Transition Period is complex and multi-dimensional in various ways that SoCalGas initiated with the work in its 2010- 2012 portfolio.First, local governments are a distinct customer segment that operates with their own unique challenges and needs related to energy efficiency. Second, local governments also serve as a delivery channel for specific products and services when they serve as Local Government Partnerships. Finally, local governments have a unique role as leaders of their communities. Increasingly,local governments are interpreting their moral responsibility for community well-being to include reducing greenhouse gas (GHG)emissions, increasing renewable energy usage,protecting air quality, creating green jobs, and making the community more livable and sustainable. In response to the Commissions directive to continue"successful" government partnerships, SoCalGas hosted a public external stakeholder meeting with labor groups, environmentalists, academics, LGP's and others to seek input on our programs. A follow-up webinar with participants was conducted to share the results from the meeting. SoCalGas has partnered with SCE to further engage with their LGP's through meetings to seek partner feedback on their accomplishments, municipal and community needs as well as discuss success criteria. Through this open and collaborative process, SoCalGas and SCE were able to share feedback and conclusions through a webinar with their partners, and members of LGSEC. After completing a critical and comprehensive review of all the programmatic activities each local government partner engaged in, SoCalGas and SCE developed the following list of success criteria that was applied across each partnership concentrating on Government Facilities, Core Program Coordination/Implementation and Strategic Plan Menu Support: l. Did the Partnership complete audits and other project opportunity identification initiatives to plan municipal retrofits? 2. Did the Partnership complete retrofits and substantially achieve cost-effective energy savings goals for municipal facilities? 3. Did the Partnership conduct community events that increased community awareness of EE/DR/DG opportunities and participation in EE programs/ 4. Did the Partnership leverage the local government relationships and communications with the community to increase participation for core programs? 5. Did the Partnership leverage local government authority.in advancing strategic plan goals including,but not limited to the following: a. Codes and Standard training b. Reach codes c. Climate Action Plans and Energy Action Plans d. Energy Management Systems/Enterprise Energy Management e. Energy policies 1413 _251- Item 9. - 18 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan Ensuring Continued Partnerships Meet Success Criteria The five (5) identified success criteria represent what SoCalGas and SCE felt were the core components that should be present in any Partnership. In the course of critically evaluating each partnerships programmatic activities, it also became apparent that not only do these criteria represent what a successful partnership looks like, but that these criteria are the progeny of the unique collaborative relationship present in our service territory, as such, the aggregate value of these criteria applied across the scope of the LGP program is greater than the sum of each individual partners contribution. To that end, the following provides details on how the LGP program and its individual partners will continue to meet the criteria identified above. Looking across the Program, each Partnership is anticipated to complete the targeted goals set forth in the 2010-2012 program cycle, and has thus been identified as a "successful" Partnership to continue in the 2013-2014 Transition Period. Moving forward, the LGP program will be working toward meeting the mid-term goals identified in the Energy Efficiency Strategic Plan, building off the success and momentum established during the 2010-2012 cycle. SCE and SoCalGas have identified separate set of criteria to address our interest in expanding local government programs. The IOU's developed the following list of expansion criteria that will be applied across each partnership that is included into the program in 2013-14. Partnerships will address the following priority areas: 1. Deeper retrofits within 2. Workforce education and training 3. Codes and Standards enforcement and training 4. Emerging technologies deployment 5. Water/Energy nexus Further consideration will be taken on what additional resources will the Partnerships leverage to implement the expansion and address how the expanded Partnership complements.existing Partnership efforts. SoCalGas has also been collaborating with PG&E, and will share the same criteria for those partnerships that are shared with PG&E. The Government Partnership program is designed to reach local governments in all of their roles. Depending upon the activity, SoCalGas may play a different role with the local government, ranging from service provider to supporter to equal partner. Local governments increasingly engage in strategic planning for GHG reduction not only in their facilities (represented in the municipal GHG inventory) but also in the community(analyzed in the community GHG emissions inventory). Opportunities increase for partnerships with utilities to meet mutual goals of energy reduction. Some of the key programs which LGPs will support in 2013-14 include EUC—WHUP, Workforce Education and Training, and Business Improvement Districts. These governments can not only coordinate and integrate demand-side management(DSM) opportunities in each sector or market they influence, but also effectively leverage and promulgate low-income offerings. Item 9. - 19 uB -252- 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan SoCalGas will develop a marketing plan and marketing collateral based on customer segmentation work and research to support outreach efforts. This customer segmentation will help SoCalGas develop an understanding of customers' needs and respond accordingly with products and services that customers want. The segmentation analysis looks at what the customer requires and how the customer is engaged with SoCalGas. SoCalGas will use many delivery channels and marketing and outreach approaches to effectively reach customers. This will include a team of SoCalGas experts and industry professionals,varying by market sub- segment, to deliver integrated offerings to the customer. Expansion of Local Government Partnerships In the effort to expand on SoCalGas' success of their local government partnerships the LGP's will concentrate on several areas deemed necessary. LGP's will continue to promote EUC - WIIUP, a one-stop-shop for home improvement projects that lower energy use, conserve water and natural resources, and makes residences healthier and more comfortable. Deep energy retrofits will be a priority in the 2013-2014 program cycle. A deep energy retrofit is a whole- building analysis and construction process that uses integrative design to achieve much larger energy savings than conventional energy retrofits. Deep energy retrofits can be applied to both residential and non-residential ("commercial") buildings. Other Expansion Opportunities will include closing the gap between partnerships that currently have partnerships with SCE and adopting those partners into SoCalGas LGP program in 2013-14 transition period. SCG has initiated discussions with several potential new partners which are currently in partnerships with SCE. Our goal is to complete the first round of discussions by the end of January, and to have draft agreements to new partners by the end of February 2013. Upon reaching firm agreements with new partners, SCG will submit an advice filling specifyingdetails of the new parterships including theirPIPs. Design for new PIPS will be consistant with CUPC guidance including comprehensive and deep retrofits. SoCalGas has listened to feedback received from LGPs on needs which they face for being able to move forward with projects. The majority of local governments struggle with securing energy/sustainability resources, and current budget conditions make the availability of such resources unlikely for the foreseeable future. Limited staff, specific skills and geographical constraints limit local government's ability to engage in hands on energy efficiency. SoCalGas intends to start building resources to fill the noted gaps through a"virtual center" approach as an expansion to our current Local Government Partnership program offerings. The Program will commence in one region initially with the intent to roll out service territory wide in 2013-14 program cycle. The program will support local governments(both partners and non- partners) and intends to drive increased comprehensive energy efficiency and will create deep energy savings by local governments by complimenting and leveraging resources as well as filling gaps that currently exist within local government organizations, CEC, PUC and SoCalGas energy efficiency programs. These gaps prevent local government from successfully implementing higher value energy efficiency projects that demonstrate energy efficiency leadership to the community and increase community wide energy efficiency participation. HB -253- Item 9. - 20 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan Lessons learned from past partnership initiatives have identified the need for improvement in resources that provide cost-effective, on demand energy management services, and expertise to enable local governments to create responsive, sustainable, and widespread public sector energy management results. The"virtual center" approach will provide turnkey resources through hands on support, results oriented energy management, and augmenting existing Local Government Partnerships. A suite of resources shall include project management support, engineering and analytical support, library of boiler plate agreements and templates that can support local government with the RFP process as well as assistance securing financing from various sources. Providing these resources will result in improved energy management activity and increased program participation through energy efficiency and financing programs. 2. Projected Program Budget Table Table 1 Program Administrative Marketing Direct Incentive Total Program # Main/Sub Program Name Amount Amount implementation Amount Budget Amount Amount Local Government Partnership Programs 3742 LGP-LA Co Partnership $86,972 $58,386 $288,588 $0 $433,946 3743 LGP-Kern Co Partnership $80,981 $33,763 $93,720 $0 $208,464 3744 LGP-Riverside Co Partnership $78,002 $38,305 $177,810 $0 $294,117 3745 LGP-San Bernardino Co Partnership $75,579 $34,305 $179,833 $0 $289,717 3746 LGP-Santa Barbara Co Partnership $92,034 $53,661 $83,599 $0 $229,294 3747 LGP-South Bay Cities Partnership $99,085 $32,933 $175,915 $0 $307 932 3748 LGP-San Luis Obispo Co Partnership $77,516 $47,594 $89,453 $0 $214,563 3749 LGP-San Joaquin Valley Partnership $71,124 $31,633 $91,532 $0 $194,289 3750 LGP-Orange Co Partnership $85,387 $44,661 $141,890 $0 $271,938 3751 LGP-SEEC Partnership $111,478 $32,916 $151,000 $0 $295,394 3752 LGP-Community Energy Partnership $87,482 $37,255 $127,910 $0 $252,647 3753 LGP-Desert Cities Partnership $18,097 $7,585 $24,918 $0 $50,600 3754 LGP-Ventura County Partnership $105,669 $66,370 $164,122 0 $336161 3755 LGP-Regional Energy Efficiency Pilots $0 $0 $0 $0 $0 3773 LGP-New Partnership Programs $827,299 $360,600 $1,600,000 $0 2,787,899 3774 LGP-LG Re 'onal Resource Placeholder $93,194 $40,000 $511,673 $0 $644,867 TOTAL: $1,989,899 $919,966 $3,901,963 $0 $6,811,828 Note: SCG LGP programs are non-resource;therefore,the above table indicates $0 for the incentive. LGPs will funnel projects to Incentive and Rebate Programs. 3. Program Element Description and Implementation Plan This LGP Master PIP describes each of the program elements listed below. The Master PIP discusses the major program elements of Government Facilities, California Long Term Energy Efficiency Strategic Plan(Strategic Plan) Support, and Core Program Coordination in an over- arching context in sections 4 - 6. Following the Master PIP discussion are sub-PIPS (which also cover sections 4-6) for the additional unique program elements for each of the individual Local Government Partnerships.. The sub-PIPs also discuss the three major program elements (Government Facilities, Strategic Plan Support, and Core Program Coordination). The sub-PIPs for individual LGPs provide details regarding any targeted or distinct aspects of the three main elements as they relate to that particular LGP. Item 9. - 21 HB -254- 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan Program Element A. Government Facilities A 1 —Deep Retrofit of County and Municipal Buildings A2 - Retro-commissioning A3 - Integrating Demand Response A4 -Technical Assistance A5 - On-Bill Financing B. Strategic Plan Support 131 - Code Compliance B2 -Reach Code Support B3 - Guiding Document Support B4- Financing for the Community B5 -Peer to Peer Support C. Core Pro ram Coordination C 1- Outreach Education C2 - Third Party Program Coordination C3- Technical Assistance D. Local Government Regional Resource Program- (Unique Program Element E. Individual Local Government Partnerships Element - Government Facilities 4—Program Element Description and Implementation flan —Element A - Government Facilities A. Government Facilities Al —Deep Retrofit A2 - Retro-commissioning A3 - Integrating Demand Response A4- Technical Assistance A5 - On-Bill Financing Overview The Government Facilities element will be implemented by most of the unique individual Local Government Partners(LGPs). This section(4A-6A) describes the standard overview, rationale, outcomes, and barriers associated with the Government Facilities element by an LGP. If an individual LGP has a distinctive or targeted approach to Government Facilities,that LGP's individual PIP will contain additional information. The individual LGPs will primarily target local government facilities/sites that are owned or leased by public agencies including city halls, administrative offices, recreation centers, fire stations, libraries. HB -255- Item 9. - 22 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan Individual LGPs play an important role in assisting local governments (cities, counties and special districts) with retrofitting the facilities that they own and operate to achieve short and long term energy savings. While all local governments have access to SoCalGas programs and incentives to save energy, SoCalGas Government Partnership Program will work closely with the LGPs to build local capacities to achieve deep retrofits in government facilities' energy savings and to place these projects in the context of sustainability and climate change initiatives. Approaching efficiency through deep retrofits in government facilities in this way not only achieves short and long term energy savings, it also demonstrates a commitment to energy efficiency to the local government's constituents and the community at large. This, in turn, enables government partnerships to become champions for energy efficiency programs and other utility programs to further reduce usage in their communities. Additionally, a comprehensive approach to government facilities will be an important step to addressing Assembly Bill 32 (AB32) and other statewide or local GHG reduction requirements. This program element will include five sub-elements: Deep retrofits for Government Facilities, Government Facilities Retro-commissioning, support Integrated Demand Response, provide Technical Assistance, and On-Bill Financing. Al -Retrofits: Local Government Partnerships which choose to include a Government Facilities Retrofit element in their programs will achieve energy savings by providing technical, financial, managerial and administrative support to the government actor (usually a facilities manager) who initiates and implements deep energy-efficiency retrofit projects. Sometimes this entity is the same as the Partner, and other times it is a different entity. The degree of assistance provided will be tailored to each agency's needs, taking into account for energy savings potential, cost effectiveness, level of commitment, available funds and in-house technical expertise. This program element will be leveraged by and integrated with other programs such as retro-commissioning, supporting demand response and self-generation as appropriate to achieve comprehensive impacts while minimizing lost opportunities. Energy savings will be based on measures installed, e.g., retrofitted. Measures include, but are not limited to,the following: Measure End Use Types Planned Boiler System Retrofits, Boiler Control HVAC,Economizer Water Heating, Solar Thermal Natural Gas Water Pumps Other A2 -Retro-commissioning(RCx): Local Government Partnerships which choose to include a Government Facilities Retro-commissioning element in their programs will provide similar Item 9. - 23 HB -256- 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan services as those described above for retrofits. RCx is a systematic process for identifying less- than-optimal performance in an existing building's equipment, lighting, and control systems and making necessary adjustments. Whereas retrofitting involves replacing outdated equipment,RCx focuses on improving the efficiency of what is already in place. RCx will serve as a process for identifying opportunities for deep retrofits. As mentioned in Al, by bundling RCx with retrofits and other comprehensive options,the customer will optimize their efficiency and get the best bang for the buck. Measures include but are not limited to the following: Measure End Use Types Planned Boilers HVAC controls and tune u Water Heating Other A3—Integrating Demand Response: LGPs will determine demand response (DR)potential in the course of comprehensively evaluating sites for energy efficiency retrofit and retro- commissioning opportunities. DR will be integrated with energy efficiency and referrals to DR programs will be made as appropriate. In addition to DR programs, partnerships will continue to identify self-generation opportunities. SoCalGas will work with the Partnerships to ensure that comprehensive packages are made available to the local governments within that Partnership, including,for example a menu of DR options. The LGP will promote offerings through an integrated marketing collateral and sales approach. With additional market segmentation and feedback from customers,the utilities will adjust approaches in order to offer the combination of programs to best meet the varied needs of customers. The goal is to integrate offerings through building auditing and assessment,marketing materials and the strategic sales approach. A4 -Technical Assistance: While SoCalGas makes technical assistance available to all governments, the LGPs will have targeted resources to provide technical assistance to the agencies within each LGP's geographic area. This assistance is an integral component of LGP administered energy efficiency programs and may take the form of engineering audits, equipment specifications, engineering and cost- effectiveness calculations, field inspections, and equipment testing and analysis, and is an integral component of LGP-administered energy efficiency programs. Partnerships will provide technical support for developing,packaging and completing energy-efficient retrofit projects. Additionally, SoCalGas will provide partnerships with training and access to benchmarking technology such as the USEPA/Energy Star Benchmarking tool to identify the government facilities with the highest potential. Partnerships will also provide resources for city staff training and certification in the following;Building Operator Certification, Certified Energy Management, LEED accreditation, Green Point rated and other applicable trainings. This training will serve to build knowledge of energy management and resource conservation within the LGP. A5 - On-Bill Financing HB -257- Item 9. - 24 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan On-Bill financing (OBF) will be offered to local governments for the qualified energy efficiency projects. In addition to OBF, LGPs may utilize other financing options such as CEC loans or municipal bonds as well as other state/federal grant programs. Target Audience Al—Retrofit The target audience is Government Facilities, which can include municipal administration buildings as defined by NAICS 3 such as: City Libraries Fire Stations County Medical Hospitals County Correctional Facilities Police Stations Municipal Teen Centers Municipal Recreation Centers City/County Museums Municipal Animal Shelters Public Works Department Facilities Municipal Water Agencies Municipal Transit Agencies A2—Retro-commissioning Same as Al A3-Integrating Demand Response Same as Al A4—Technical Assistance Technical assistance associated with government facility retrofits will be targeted at the appropriate city staff including Department of Public Works,Energy Office, Department of Building Inspection,Department of the Environment, etc. While each partnership might vary slightly,the key target audience will be energy managers. A5 —On-Dill Financing SoCalGas offers zero percent financing to eligible customers with up to $250,000 per meter for taxpayer-funded institutional customers (e.g., cities, counties, other public agencies, etc.) and $100,000 per meter for non-institutional customers. Implementation Al—Retrofit The LGPs will offer a comprehensive portfolio of energy efficiency programs that target deep retrofits in municipal facilities. By partnering with local governments, Partnerships are well Item 9. - 25 HB -258- 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan positioned to promote energy efficiency in their communities. Retrofit program offerings will include energy audits, calculated and prescriptive rebates, and direct installation of a comprehensive portfolio of measures. To promote this program element,Partnerships will distribute throughout their networks marketing materials and information that is well coordinated with utility and statewide marketing plans. The Partnerships will also leverage their community relationships as well as community based organizations and associations. Partnerships may also directly market to municipal and special district staffs and engage key stake holders within the local government and the community. Partnerships will work to achieve both immediate and comprehensive, long-term energy savings. Energy efficiency strategies and measures will be coordinated throughout municipal departments to streamline implementation. Partnerships will implement energy efficiency by providing comprehensive assessments, conservation measures and training and education to the local governments. A2—Retro-commissioning (RCx) LGPs with a Government Facilities Retrofit element may choose to include a Government Facilities RCx program element. Such LGPs will perform field-based functional tests at the building system and/or building subsystem level to identify RCx opportunities that will deliver energy and demand savings. Each Partnership will tailor minimum criteria(as developed by SoCalGas)to identify RCx projects that will deliver the most savings. Each potential project will be assessed by technical feasibility and cost effectiveness. Preliminary investigation of a site's potential will include on-site equipment testing, monitoring, and/or verifying proper operation and calibration of a sample of the building systems and/or building sub-systems to be included in the proposed RCx projects. A3-Integrating Demand Response In evaluating opportunities in government facilities, Government Partnerships will also determine demand response potential. LGPs will make referrals to demand response programs as appropriate. In addition to demand response programs, partnerships will continue to identify self-generation. Refer to the Integration PIP for more detailed information. A4—Technical Assistance Assistance will be tailored to each agency's needs, scaled to the potential energy savings and level of commitment of the participating agency, and strategically applied to leverage the most savings from available resources. Technical assistance may also include education and training, support for peer networking to support best practices,team building and staff training. AS—On-Bill Financing Refer to the on-bill financing section included in Testimony Chapter 3 S-Program Element Rationale and Expected Outcome—Element A - Government Facilities a) Quantitative Baseline and Market Transformation Information Market Transformation(MT)metrics proposed in Tables 2 and 3 are preliminary. The proposed metrics are meant to initiate a collaborative effort to elaborate meaningful metrics HB -259- Item 9. - 26 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan that will provide overall indicators of how markets as a whole are evolving. MT metrics should neither be used for short-term analyses nor for specific program analyses;rather, should focus on broad market segments. Market transformation is embraced as an ideal end state resulting from the collective efforts of the energy efficiency field, but differing understandings of both the MT process and the successful end state have not yet converged. The CPUC defines the end state of MT as "Long-lasting sustainable changes in the structure or functioning of a market achieved by reducing barriers to the adoption of energy efficiency measures to the point where further publicly-funded intervention is no longer appropriate in that specific market."' The Strategic Plan recognizes that process of transformation is harder to define than its end state, and that new programs are needed to support the continuous transformation of markets around successive generations of new technologies2. Market transformation programs differ from resource acquisition programs on 1) objectives, 2) geographical and 3) temporal dimensions,4) baselines, 5)performance metrics, 6) program delivery mechanisms, 7)target populations, 8) attribution of causal relationships, and 9) market structures3. Markets are social institutions4, and transformation requires the coordinated effort of many stakeholders at the national level, directed to not immediate energy savings but rather to intermediary steps such as changing behavior, attitudes, and market supply chains as well as changes to codes and standards. Resource acquisition programs rely upon the use of financial incentives, but concerns have been raised that these incentives distort true market price signals and may directly counter market transformation progress 6. According to YorkT, "Market transformation is not likely to be achieved without significant, permanent increases in energy prices. From an economic perspective,there are 3 ways to achieve market transformation: (1) fundamental changes in behavior, (2)provide proper price signals, and (3)permanent subsidy." The question of what constitutes successful transformation is controversial because of a Catch-22: Market transformation is deemed successful when the changed market is self- sustaining, but that determination cannot be made until after program interventions are ended. Often,however, the need for immediate energy and demand savings or immediate carbon-emissions reductions will mean that program interventions may need to continue, California Public Utilities Commission Decision,D.98-04-063,Appendix A. 2 California Public Utilities Commission(2008)California Long Term Energy Efficiency Strategic Plan,p.5.Available at http://www.califomiaenergyeffrciency.com/docs/EEStrategiePlan.pdf 3 Peloza,J.;and York,D.(1999)."Market Transformation:A Guide for Program Developers."Energy Center of Wisconsin. Available at:http://www.ecw.org/ecwresults/I89-l.pdf Blumstein, C.,Goldstone,S.,&Lutzenhiser,L.(2001)"From technology transfer to market transformation".Proceedings of the European Council for an Energy Efficient Economy Summer Study.Available at http://www.eceee.org/conferencejroceedings/eceee/2001/Panel_2/p2 7/Paper/ 5 Sebold,F.D.,Fields,A.,Skumatz,L.,Feldman,S.,Goldberg,M.,Keating,K.,Peters,J. (2001)A Framework for Planning and Assessing Publicly Funded Energy Efficiency.p.6-4.Available at www.cahnac.org. 6 Gibbs,M.,and Townsend,J.(2000).The Role of Rebates in Market Transformation: Friend or Foe.In Proceedings from 2000 Summer Study on Energy Efficiency in Buildings. 7 York,D.,(1999)."A Discussion and Critique of Market Transformation",Energy Center of Wisconsin. Available at http://www.ecw.org/ecwresults/I 86-1.pdf. Item 9. - 27 HB -260- 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan which would interfere with the evaluation of whether MT is self-sustaining. Market transformation success has also been defined in terms of higher sales of efficient measures than would have otherwise occurred against a baseline absent of program interventions. The real world,however,provides no such control condition. Evaluators must estimate these baselines from quantitative factors such as past market sales that may be sparse and/or inaccurate-particularly for new products.Evaluations must also defer to expert judgments on what these baselines may have been as well as on the degree of successful market transformation$. Due to the subjective nature of these judgments, it is imperative that baselines as well as milestone MT targets be determined and agreed upon through collaborative discussion by all stakeholders, and these targets may need periodic revision as deemed necessary by changing context. Market transformation draws heavily upon diffusion of innovation theory" with the state of a market usually characterized by adoption rate plotted against time on the well-known S- shaped diffusion curve. In practice,however,the diffusion curve of products may span decades10. Market share tracking studies conducted 3, 5 or even 10 years after the start of an MT program may reveal only small market transformation effects". The ability to make causal connections between these market transformation effects and any particular program's activities fades with time, as markets continually change and other influences come into play. These challenges mentioned above are in reference to programs that were specifically designed to achieve market transformation; and these challenges are only compounded for programs that were primarily designed to achieve energy and demand savings. However, since the inception of market transformation programs almost two decades ago,many lessons have been learned about what the characteristics of successful MT programs are. First and foremost,they need to be designed specifically to address market transformation. "The main reason that(most)programs do not accomplish lasting market effects is because they are not designed specifically to address this goal (often because of regulatory policy directions given to program designers.)12" The Strategic Plan recognizes that regulatory policies are not yet in place to support the success of market transformation efforts 13, but also reflects the CPUC's directive to design energy efficiency programs that can lay the groundwork for either market transformation success or for codes and standards changes. Above all else,the hallmark of a successful market transformation program is in the coordination of efforts across many stakeholders. The most successful MT programs have involved multiple organizations,providing overlapping market interventions14. The Strategic s Nadel,S.,Thorne,J.,Sachs,H.,Prindle,B.,and Elliot,R.N.(2003)."Market Transformation:Substantial Progress from a Decade of Work."American Council for an Energy-Efficient Economy,Report Number A036.Available at: http://www.aceee.org/pubs/a036full.pdf 9 Rogers(1995)Diffusion of Innovations,511'Ed. 10 Example in bottom chart of this graphic from NYTimes: http://www.nytimes.com/imagepages/2008/02/1 O/opinion/1 Oop.graphic.ready.html 11 Sebold et at(2001)p.6-5, 12 Peters,J.S.,Mast,B.,Ignelzi,P.,Megdal,L.M.(1998).Market Effects Summary Study Final Report: Volume 1."Available at http://calmac.org/publications/I 9981215 CAD 0001 ME.PDF. 13 CPUC(2008)Strategic Plan,p.5. 14 Nadel,Thorne,Saches,Prindle&Elliot(2003). UB -261- Item 9. - 28 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan Plan calls for coordination and collaboration throughout, and in that spirit the utilities look forward to working with the CPUC and all stakeholders to help achieve market transformation while meeting all the immediate energy, demand, and environmental needs. Drawing upon lessons learned from past MT efforts,the Energy Center of Wisconsin's guide for MT program developers15 suggests that the first step is not to set end-point definitions, progress metrics or goals. Rather, the first steps include forming a collaborative of key participants. As the Strategic Plan suggests,these may include municipal utilities, local governments, industry and business leaders, and consumers. Then, with the collective expertise of the collaborative, we can define markets, characterize markets, measure baselines with better access to historical data, and define objectives, design strategies and tactics, implement and then evaluate programs. The collaborative will also provide insights that will set our collective expectations for the size of market effects we can expect,relative to the amount of resources we can devote to MT.No one organization in the collaborative will have all the requisite information and expertise for this huge effort. This truly needs to be a collaborative approach from the start. The metrics and baselines described below in Tables 2 and 3 are presented for the purposes of starting the much-needed discussion between all key participants. These are suggestions, intended to allow key participants to pilot-test processes for establishing baseline metrics, tracking market transformation progress, and for refining evaluation tools. Early trial of these evaluation metrics will reveal any gaps in data tracking so that we may refine our processes before full-scale market transformation evaluations take place. The set of metrics we selected is intentionally a small set, for several reasons. First, as mentioned, the full set of metrics and baselines need to be selected by key participants. Second, we anticipate that market share data for many mid- and low-impact measures will be too sparse to show MT effects and not cost-effective to analyze. Third, we selected core measures and metrics that would both be indicative of overall portfolio efforts. These measures are also likely to be offered on a broad level by other utilities, providing a greater base of sales and customer data that could be analyzed for far-reaching MT effects. Therefore,for the Local Government Partnerships the following approach to quantitative baseline and market transformation information is presented as follows. The utilities recommend development of a baseline, and tracking the number of cities, counties and government institutions that have plans for written energy efficiency provisions. Such a metric relates directly to the Strategic Plan (Goal 12.3.4) in terms of measuring progress towards 50%plans for sustainability. In addition, we propose tracking community adoptions of new construction model reach codes, both residential and nonresidential. This metric aligns with the Strategic Plan (Goal 12.3.1). In addition to being a direct indicator of support by local government partnerships, community adoptions of model reach codes are of strategic interest to the CPUC. A proliferation of dissimilar reach codes would confuse the market relative to building codes and incentive programs. Model reach codes to be developed by Codes and Standards would L5 Peloza&York,(1999). Item 9. - 29 xB -262- 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan allow energy efficiency efforts across partners to be aligned with a clear target for each climate zone. As discussed in the Local Government PIPs,the IOUs intend to work closely with partners in establishing baseline code compliance levels and pushing for model reach codes. With this discussion in mind, IOUs propose the following metrics for this sector: Baseline Metric Metric A Metric B Baseline inventory of cities, counties and government institutions within the IOU territory that have adopted such Energy Efficiency energy planning Action Plans documents as Energy Action Plans, Climate Action Plans and Sustainability Plans, and General Plans with energy or climate elements. In coordination with Codes and Standards, develop a baseline Model Reach Codes inventory of cities and counties within the IOU territory with adopted model reach codes b) Market Transformation Information As stated above,market transformation draws heavily upon diffusion of innovation theory, with-the state of a market characterized by adoption rate plotted against time on the well- known S-shaped diffusion curve. In practice, however,the diffusion curve of products may span decades. Market share tracking studies conducted 3, 5 or even 10 years after the start of an MT program may reveal only small market transformation effects. Therefore it is problematic, if not impractical,to offer internal annual milestones towards market transformation sectors and specific program activities. As a consequence, it is not appropriate to offer more than broad and general projections. Any targets provided in the following table are nothing more than best guesstimates, and are HB -263- Item 9. - 30 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan subject to the effects of many factors and market forces outside the control of program implementers. Fable 3 Internal Market Transformation Planning Estimates 2013 2014 Baseline inventory of cities, counties and government institutions within the IOU territory that have adopted such energy planning documents as Improvement over Improvement over Energy Action Plans, baseline, over time baseline, over time Climate ActionTlans and Sustainability Plans, and General Plans with energy or climate elements. In coordination with Codes and Standards, develop a baseline inventory of cities and Improvement over Improvement over counties within the baseline, over time baseline, over time IOU territory with adopted model reach codes c) Program Design to Overcome Barriers: Refer to individual partnership PIP section. d) Quantitative Program Objectives: Fable 4 Program Target by Program Target by Program/Element 2013 2014 Target#1 N/AN/A N/AN/A Target#2 N/AN/A N/AN/A Target#3 N/AN/A N/AN/A Target#4 N/AN/AN/A N/AN/AN/A Refer to individual partnership PIP section. Item 9. - 31 HB -2164- 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan 6- Other Program Element Attributes-ElementA - Government Facilities Other Program Element Attributes Government Facilities a)Best Practices: Describe why program The approach to Local Government Facilities element approach constitutes"best practice" constitutes a best practice because it or reflects"lessons learned"in market incorporates the lessons learned from past strategies,program design and/or program cycles. SoCalGas has seen that, as implementation techniques, or past local governments become champions for experience. Provide references where energy efficiency in their communities,there is available. an increased focus on leading by reducing energy use in municipal facilities. In line with the Strategic Plan,the 2013 - 2014program cycle will pave the path for a 20%reduction below 2003 levels by 2015 and.20%below levels by 2020. b)Innovation: Describe any unique or The Government Facilities program element innovative aspects of program element not incorporates innovative aspects of program previously discussed. Why is this innovative? design, as discussed above. These include benchmarking, community finance, and framing the facilities work within a climate action framework. Government Partnerships have used innovative solutions to address barriers. In using benchmarking technology and other technical assistance, Government Partnerships plan to prioritize the facilities that are best suited for retrofits. Additionally, each partnership will work to address potential barriers by sharing solutions and best practices. The Partnerships program will explore options for addressing financial barriers (e.g., support for California Energy Commission(CEC) loans and other funding opportunities) and support individual Partners that want to pilot new approaches, such earmarking energy savings in a separate fund to ensure that savings do not go back into the general fund. c) Interagency Coordination: Describe any The Government Partnerships program will interagency coordination with the ARB, CEC foster coordination in relation to government on PIER or Codes and Standards; non-utility facilities efficiency, encouraging LGPs to make market initiatives; energy efficiency market use of coordination resources including: forces, opportunities and trends; and timeline o Participate in the CEC loan program for by which market segment will be governments. "transformed" or other aspects of the o CEC's Public Interest Energy Research HB -265- Item 9. - 32 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan Other Program Element Attributes Government Facilities program. (PIER) program o "EPA Energy Star Low Carbon IT Campaign Ally" with their power management savings program. o Work with the ARB as well as other agencies to co-market materials, co- brand programs, etc. d)Integrated/coordinated Demand Side Partnerships will achieve coordinated delivery Management: Describe how program will of DSM options. Some LGPs will achieve achieve integrated or coordinated delivery of integration of all elements,while others will all DSM options, as well as LIEE and WET. only integrate a few. The integrated elements (If this is an integral part of the program will include: element and fully covered under#4 note that • Integrated energy audits will be offered here.)Describe in detail how program will to government facilities that show achieve integrated or coordinated delivery of savings potential and are willing to all DSM options (energy efficiency, demand commit to the additional time and response, and onsite generation)where financial investments. Standard energy applicable including integrated program efficiency audits will be offered to most design and delivery, shared budgets,program program participants. evaluation, and incentive mechanisms that • Emerging Technologies and CEC-PIER promote greater integration of DSM collaboration is expected to include pilot resources. Provide a complete description for projects and market acceleration all the technologies, including integration assistance for market-ready products in supporting technologies that will be included the general categories of day lighting, in the program. If the program does not lighting, HVAC, controls, and building include all DSM options as noted above, envelope improvements. briefly provide an explanation for a more ® Commissioning and retro-commissioning limited subset of DSM technologies. Utilize services will be continued to segment Attachment 5A to highlight any shared or customers. leveraged budget categories and amounts • Demand response opportunities will be (admin, incentives, ME&O, and other targeted in the larger facilities, applicable categories). particularly as part of monitoring-based retro-commissioning efforts where the controls to facilitate demand response efforts would be installed. • Coordination with LIEE to provide services to middle-income ("just above LIEF") customers. Item 9. - 33 xB -266- 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan Other Program Element Attributes Government Facilities e)Integration across resource types (energy, Government Partnerships will encourage water, air quality, etc): If program aims to conversations with other resource agencies integrate across resources types, provide including water, air quality and transportation rationale and general approach. (If this is an authorities. The partnerships will enable integral part of the program element and fully individual LGPs to coordinate with other covered under#4 note that here.) resource programs, such as water, waste,in achieving efficiencies in government facilities. f)Pilots: Describe any pilot projects that are Some of the Pilots may address government part of this program (If this was fully covered facility efficiency. Smaller pilots may be under#4,note that here.) implemented by individual LGPs as part of their partnership activity. The Government partnership team intends to do an assessment of government facilities and may pilot new approaches as a result of this assessment. g)EM&V: Describe any process evaluation or A process evaluation will be conducted by a other evaluation efforts that will be third party evaluator. The evaluation will assess undertaken by the utility to determine if the communication and coordination effectiveness program is meeting its goals and objectives. between partners as well as satisfaction with the Include the evaluation timeframe and brief service and increased awareness of energy description of scope, as well as a summary of efficiency opportunities. A combination of specific methodologies, if already developed. interviews and focus groups will likely be used If not developed, indicate the process for to collect data. The evaluation is expected to developing them. Include reference to build upon results found in the recently tracking databases that will be used for completed process evaluation for PY2006 to evaluation purposes. 2008. HB -267- Item 9. - 34 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan Element B -Strategic Plan Support 4—Program Element Description and Implementation—Element B-Strategic Plan Support E. Strate is Plan Support Bl - Cade Compliance B2 -Reach Cade Support B3 - Guiding Document Support B4 - Financing for the Community B5 - Peer to Peer Support Overview The Strategic Plan Support element will be implemented primarily through various strategies described in the Menu of Local Government Strategies for the California Long-Term Energy Efficiency Strategic Plan. The ultimate goal for local governments in the Strategic Plan is to embed and institutionalize energy efficiency in their policies, programs and processes. Individual LGPs will also play an important role in furthering the strategic plan. This section(413 —613) describes the standard overview,rationale, outcomes, and barriers associated with an individual LGPs implementation of the Strategic Plan support element. If an individual LGP has a different or targeted approach to Government Facilities,that LGP's individual PIP will contain additional information. It is important to note that individual Partners vary widely in terms of haw appropriate and/or ready each Partner is to undertake activities related to supporting the Strategic Plan. The functions for Strategic Plan support are quite distinct(from codes to policy to finance). Given the diversity of entities serving as the individual LGP, some Partners can accommodate all of the distinct roles required for Strategic Plan support while others cannot. The partners that directly represent a government entity will have different responsibilities and capabilities than those partners that represent a regional group. For example, governments are appropriate entities to enact policies including reach codes, GHG targets, and general plan updates, but regional groups are better positioned to perform broader functions such as developing regional plans. In cases where the individual Partner does not function as a leader for some or all of the Strategic Plan initiatives (codes, climate plans, financing, and peer support), the Partner can often still play a supporting role. Partners exhibit varying readiness to engage in Strategic Plan activity. Some partners have very limited staff and budgets and may be engaging in energy efficiency and sustainability issues for the first time. Other partners have been working on these issues for several years and are among the leading municipalities in the country in their sustainability efforts. Therefore,the approach to achieve Strategic Plan initiatives will need to be tailored to suit the individual needs and capabilities of each Partner. Item 9. - 35 HB -268- 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan Local Government Partnerships will also implement,to varying degrees, aspects of the Strategic Plan Support element. The degree will depend on how far along the energy efficiency learning curve the partnership is. The Strategic Plan activities focus on long term change that will result in permanent, sustainable energy savings, and that draw on the unique capabilities of local governments, otherwise cannot be performed by other entities. This work should occur across departments so that energy efficiency practices become business as usual in planning, building, finance departments,public policy development and other functions of the local government agency. The following section catalogs approaches and techniques that LGPs may choose to utilize to make constructive use of local government policies and services to promote community sustainability. BI - Code Compliance The Code Compliance sub-element will be implemented primarily through the Codes and Standards program, as described in the Codes and Standards PIP. Some individual LGPs will take action related to code compliance by engaging in a range of activities that will be coordinated with the Codes and Standards program. LGP Code Compliance activities may include training local government staff that is charged with code compliance in coordination with SoCalGas Codes and Standards program or through training and education classes. LGP activity may also include developing and implementing certification programs for local inspectors and contractors. LGPs may assist with marketing in coordination with SoCalGas and statewide marketing activities, including advertising training opportunities to relevant trades, raising awareness of current codes among business and residential customers and encouraging compliance. Local Governments often have access to constituents through existing relationships and can use those routes to enhance or complement other energy efficiency marketing activities. Please refer to the Codes and Standards PIP for further information. B2 -Reach Code Support The Reach Code Support sub-element will be implemented primarily through the Codes and Standards program. Some individual Partnerships may choose to include Reach Code activities to promote local codes that exceed Title 24 requirements. Again, all reach code support activity will be coordinated with the Codes and Standards program. Partnerships that include Reach Code activities could perform activities that range from training local government staff regarding adoption and implementation of model reach codes to establishing expedited permitting and entitlement approval processes, fee structures and other incentives for green buildings and other above-code developments. Examples could include green building standards for new construction and retrofits/retro-commissioning or carbon offset reduction programs that exceed Title 24. SoCalGas will provide training through its Education and Training program. LGPs may attend training and/or market the training to relevant trades, in coordination with utility and statewide marketing activities. Please refer to the Codes and Standards PIP for further information. HB -269- Item 9. - 36 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan 133- Guiding Document Support: This program element will help government's complete GHG emissions inventories and climate action plans in accordance with the process developed by ICLEI and help develop guiding documents that effectively and methodically reduce community energy consumption and GHG emissions. Those partnerships that include this program element could perform activities that range from quantifying a municipality's baseline energy use, to developing a climate action plan to reduce energy use to developing policies to be incorporated into a general plan. Those partners who have not yet developed their baseline energy use could include activities to inventory their municipal operations and community GHG emissions that would support strategic planning to increase use of SoCalGas energy efficiency, demand response,renewables, and other applicable programs. Advanced Partnerships and the individual Partners with a more regional focus could develop local policy documents that could include energy elements in general plans, energy efficiency recommendations for new developments, energy-efficient equipment purchasing guidelines, community climate action plans, and analyses for energy conservation codes and ordinances targeting the private sector. Advanced Partnerships and the individual Partners with a more regional focus may assist municipalities within their jurisdictions with energy policies. For example, they may develop Community Energy Policy Packages for adopting and implementing a local energy initiative. This package may include draft policy language, a recommendation for legal authority (ordinance versus policy document versus administrative mandate); guidance and checklist for successful implementation (including assigning policy implementation to a sympathetic city department); staff report guidelines and discussion on implementations issues (e.g., how to frame objectives, scope, triggering mechanisms, requirements, and enforcement strategies). These services may also include technical assistance for agencies pursuing adoption of local policies, and may include estimating local savings impacts,providing supporting calculations or analysis of staff reports, etc. D4-Financing for the Community Some individual LGPs will implement some aspect of financing as part of their activity. A new program element will be offered to Partners to help governments explore financing opportunities such as low-interest loans through the California Energy Commission(CEC). The CEC's Energy Efficiency Financing Program provides financing for schools, hospitals and local governments through low-interest loans for feasibility studies and the installation of energy-saving measures. For those partners who include this program element,the Partnership could provide project financial analysis assistance to quantify energy efficiency project economics in terms understood by local government decision makers, and could assist facility engineering staff in presenting projects for approval. Assistance may include providing life cycle cost analysis and illustrating how energy efficiency investments can be structured to pay for themselves, while also freeing up resources through lower future facility operating costs. D5—Peer to Peer Support Individual LGPs may participate in peer sharing forums and the quarterly partner networking events set up by SoCalGas. Individual LGPs may also set up their own networks for the Item 9. - 37 xB -270- 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan governments within their area. LGPs provide an opportunity to raise awareness among local government staff and create connections across departments to lay the groundwork for the long- term change that is laid out in the strategic plan. Peer to peer exchange is one method for building local government energy efficiency knowledge and capability. LGP peer to peer exchange also may benefit utility and third party implementation staff where local government staff provides information about their local community needs and the inner workings of their local government. Information sharing can occur within each Partnership(across Partnership members), across local government staff and across Partnerships. Peer to peer support will help local governments develop energy efficiency policy and program initiatives to promote energy efficiency within the local government community. Those Partners who choose to include this element in their program could utilize a combination of peer forums, local government-focused workshops, and a web based clearinghouse that will provide specific energy efficiency information and resources. Support networks would encompass those already working in energy efficiency or related areas such as environment, climate or sustainability and those whose primary function is not directly related to energy efficiency such as building inspectors, maintenance staff and city council members. The expected outcomes are the exchange of information within, across and from Partnerships to broader local government staff. The range of expected impacts is consistent with elements of the strategic plan and includes: ® Increased knowledge and awareness of energy-efficiency, ® Changes in local government behaviors related to energy efficiency, ® Increased ability to implement energy efficiency within local government, and ® Creation of linkages across local government staff and added resources that maximize the government's ability to develop goals and implement strategies around energy efficiency and carbon reduction. Non-Incentive Services The functions and activities discussed in this section are all non-incentive services. Target Audience The Partnership program will assist local governments, quasi-governments,nonprofits focused on the public sector, and their agents in achieving objectives of the Strategic Plan. Each Partner's actions in this arena will benefit their respective constituents, including but not limited to residents, inspectors, contractors, small businesses, and other local governments. Implementation For each of the five Strategic Plan Support elements described, implementation will vary across the LGPs. For detailed information about implementation, please see the Individual LGP PIPS and Supplemental Filing—Local Government Partnership Strategic Plan Proposals in Compliance H B -2 7 1_ Item 9. - 38 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan with D.09-09-047 (Advice Letter 2445-E-A). In general, each Partnership contract will identify which strategic plan program elements will be included in the partnership program and the associated budget. The utility and partner responsibilities will be defined for each program element included in the partnership. S-Program Element Rationale and Expected Outcome—Element B-Strategic Plan Support a) Quantitative Baseline and Market Transformation Information Market Transformation(MT) metrics proposed in Tables 3 and 4 are preliminary. The proposed metrics are meant to initiate a collaborative effort to elaborate meaningful metrics that will provide overall indicators of how markets as a whole are evolving. MT metrics should neither be used for short-term analyses nor for specific program analyses; rather, should focus on broad market segments. Market transformation is embraced as an ideal end state resulting from the collective efforts of the energy efficiency field, but differing understandings of both the MT process and the successful end state have not yet converged. The CPUC defines the end state of MT as "Long-lasting sustainable changes in the structure or functioning of a market achieved by reducing barriers to the adoption of energy efficiency measures to the point where further publicly-funded intervention is no longer appropriate in that specific market.s16 The Strategic Plan recognizes that process of transformation is harder to define than its end state, and that new programs are needed to support the continuous transformation of markets around successive generations of new technologies17. Market transformation programs differ from resource acquisition programs on 1) objectives, 2) geographical and 3)temporal dimensions,4) baselines, 5)performance metrics, 6) program delivery mechanisms, 7)target populations, 8) attribution of causal relationships, and 9) market structures18. Markets are social institutionsl9, and transformation requires the coordinated effort of many stakeholders at the national level, directed to not immediate energy savings but rather to intermediary steps such as changing behavior, attitudes, and market supply chainS20 as well as changes to codes and standards.Resource acquisition programs rely upon the use of financial incentives, but concerns have been raised that these incentives distort true market price signals and may directly counter market transformation progress21.According to York22, "Market transformation is not likely to be achieved without 16 California Public Utilities Commission Decision,D.98-04-063,Appendix A. 17 California Public Utilities Commission(2008)California Long Term Energy Efficiency Strategic Plan, p.5.Available at http://www.californiacnergyeffici ency.com/docs/EEStrategi cPlan.pdf 18 Peloza,J.,and York,D.(1999)."Market Transformation:A Guide for Program Developers."Energy Center of Wisconsin. Available at:http://www.ecw.org/ecwresults/189-l.pdf 19 Blumstein,C.,Goldstone,S.,&Lutzenhiser,L.(2001)"From technology transfer to market transformation'.Proceedings of the European Council for an Energy Efficient Economy Summer Study.Available at http://www.ecece.org/conference_proceedingstecceeJ20OI/Panel_2/p2 7)Paper/ 20 Sebold,F.D.,Fields,A,Skumatz,L.,Feldman,S.,Goldberg,M.,Keating,K.,Peters,J.(2001)A Framework for Planning and Assessing Publicly Funded Energy Efficiency.p.6-4.Available at www.calmac.org. 21 Gibbs,M.,and Townsend,J.(2000).The Role of Rebates in Market Transformation: Friend or Foe.In Proceedings from 2000 Summer Study on Energy Efficiency in Item 9. - 39 xB -272- 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan significant,permanent increases in energy prices. From an economic perspective, there are 3 ways to achieve market transformation: (1) fundamental changes in behavior, (2) provide proper price signals, and (3) permanent subsidy." The question of what constitutes successful transformation is controversial because of a Catch-22: Market transformation is deemed successful when the changed market is self- sustaining, but that determination cannot be made until after program interventions are ended. Often, however, the need for immediate energy and demand savings or immediate carbon-emissions reductions will mean that program interventions may need to continue, which would interfere with the evaluation of whether MT is self-sustaining. Market transformation success has also been defined in terms of higher sales of efficient measures than would have otherwise occurred against a baseline absent of program interventions. The real world,however,provides no such control condition. Evaluators must estimate these baselines from quantitative factors such as past market sales that may be sparse and/or inaccurate-particularly for new products. Evaluations must also defer to expert judgments on what these baselines may have been as well as on the degree of successful market transformation 23. Due to the subjective nature of these judgments, it is imperative that baselines as well as milestone MT targets be determined and agreed upon through collaborative discussion by all stakeholders, and these targets may need periodic revision as deemed necessary by changing context. Market transformation draws heavily upon diffusion of innovation theory24, with the state of a market usually characterized by adoption rate plotted against time on the well-known S- shaped diffusion curve. In practice,however,the diffusion curve of products may span decades25. Market share tracking studies conducted 3, 5 or even 10 years after the start of an MT program may reveal only small market transformation effects26. The ability to make causal connections between these market transformation effects and any particular program's activities fades with time, as markets continually change and other influences come into play. These challenges mentioned above are in reference to programs that were specifically designed to achieve market transformation; and these challenges are only compounded for programs that were primarily designed to achieve energy and demand savings. However, since the inception of market transformation programs almost two decades ago, many lessons have been learned about what the characteristics of successful MT programs are. First and foremost,they need to be designed specifically to address market transformation. "The main reason that(most) programs do not accomplish lasting market effects is because they are not Buildings. 22 York,D.,(1999)."A Discussion and Critique of Market Transformation",Energy Center of Wisconsin.Available at http://www.ecw.org/ecwresults/I86-l.pdf. 23 Nadel,S.,Thorne,J.,Sachs,H.,Prind]e,B.,and Elliot,R.N.(2003)."Market Transformation:Substantial Progress from a Decade of Work."American Council for an Energy-Efficient Economy,Report Number A036.Available at: http://ww,w.aceee.org/pubs/a036U].pdf 24 Rogers(1995)Diffusion of Innovations,5`h Ed. 25 Example in bottom chart of this graphic from NYTimes: http://www.nyfimes.com/imagepages/2008/02/1 O/opinion/l Oop.graphic.ready.html 26 Sebo]d et a](2001)p. 6-5, H B -273- Item 9. - 40 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan designed specifically to address this goal (often because of regulatory policy directions given to program designers.)27,, The Strategic Plan recognizes that regulatory policies are not yet in place to support the success of market transformation efforts28, but also reflects the CPUC's directive to design energy efficiency programs that can lay the groundwork for either market transformation success or for codes and standards changes. Above all else,the hallmark of a successful market transformation program is in the coordination of efforts across many stakeholders. The most successful MT programs have involved multiple organizations,providing overlapping market interventions29. The Strategic Plan calls for coordination and collaboration throughout, and in that spirit the utilities look forward to working with the CPUC and-all stakeholders to help achieve market transformation while meeting all the immediate energy, demand, and environmental needs. Drawing upon lessons learned from past MT efforts,the Energy Center of Wisconsin's guide for MT program developers30 suggests that the first step is not to set end-point definitions, progress metrics or goals. Rather, the first steps include forming a collaborative of key participants. As the Strategic Plan suggests, these may include municipal utilities, local governments, industry and business leaders, and consumers. Then, with the collective expertise of the collaborative, we can define markets, characterize markets, measure baselines with better access to historical data, and define objectives, design strategies and tactics, implement and then evaluate programs. The collaborative will also provide insights that will set our collective expectations for the size of market effects we can expect, relative to the amount of resources we can devote to MT.No one organization in the collaborative will have all the requisite information and expertise for this huge effort. This truly needs to be a collaborative approach from the start. The metrics and baselines described below in Tables 2 and 3 are presented for the purposes of starting the much-needed discussion between all key participants. These are suggestions, intended to allow key participants to pilot-test processes for establishing baseline metrics, tracking market transformation progress, and for refining evaluation tools. Early trial of these evaluation metrics will reveal any gaps in data tracking so that we may refine our processes before full-scale market transformation evaluations take place. The set of metrics we selected is intentionally a small set, for several reasons. First, as mentioned, the full set of metrics and baselines need to be selected by key participants. Second, we anticipate that market share data for many mid- and low-impact measures will be too sparse to show MT effects and not cost-effective to analyze. Third,we selected core measures and metrics that would both be indicative of overall portfolio efforts. These measures are also likely to be offered on a broad level by other utilities, providing a greater base of sales and customer data that could be analyzed for far-reaching MT effects. 27 Peters,J.S.,Mast,B.,Ignelzi,P.,Megdal,L.M.(1998).Market Effects Summary Study Final Report: Volume 1."Available at http://calmac.org/publications/19981215CADOOO 1ME.PDF. 28 CPUC(2008)Strategic Plan,p.5. 29 Nadel,Thome,Saches,Prindle&Elliot(2003). so Reloza&York,(1999). Item 9. - 41 HS -274- 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan Therefore, for the Local Government Partnerships the following approach to quantitative baseline and market transformation information is presented as follows. The utilities recommend development of a baseline, and tracking the number of cities, counties and government institutions that have plans for written energy efficiency provisions. Such a metric relates directly to the Strategic Plan (Goal 12.3.4) in terms of measuring progress towards 50%plans for sustainability. In addition, we propose tracking community adoptions of new construction model reach codes,both residential and nonresidential. This metric aligns with the Strategic Plan(Goal 12.3.1). In addition to being a direct indicator of support by local government partnerships, community adoptions of model reach codes are of strategic interest to the CPUC. A proliferation of dissimilar reach codes would confuse the market relative to building codes and incentive programs. Model reach codes to be developed by Codes and Standards would allow energy efficiency efforts across partners to be aligned with a clear target for each climate zone. As discussed in the Local Government PIPs, the IOUs intend to work closely with partners in establishing baseline code compliance levels and pushing for model reach codes. With this discussion in mind, IOUs propose the following metrics for this sector: Baseline Metric Metric A Metric B Baseline inventory of cities, counties and government institutions within the IOU territory that have adopted such Energy Efficiency energy planning N/A Action Plans documents as Energy Action Plans, Climate Action Plans and Sustainability Plans, and General Plans with energy or climate elements. In coordination with Codes and Standards, develop a baseline Model Reach Codes inventory of cities and counties within the IOU territory with adopted model reach codes HB -275- Item 9. - 42 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan b) Market Transformation Information As stated above, market transformation draws heavily upon diffusion of innovation theory, with the state of a market characterized by adoption rate plotted against time on the well- known S-shaped diffusion curve. In practice, however,the diffusion curve of products may span decades. Market share tracking studies conducted 3, 5 or even 10 years after the start of an MT program may reveal only small market transformation effects. Therefore it is problematic, if not impractical,to offer internal annual milestones towards market transformation sectors and specific program activities. As a consequence, it is not appropriate to offer more than broad and general projections. Any targets provided in the following table are nothing more than best guesstimates, and are subject to the effects of many factors and market forces outside the control of program implementers. Internal Market Transformation Planning Estimates 2013 2014 Baseline inventory of cities, counties and government institutions within the IOU territory that have adopted such energy planning documents as Improvement over Improvement over Energy Action Plans, baseline, over time baseline, over time Climate Action Plans and Sustainability Plans, and General Plans with energy or climate elements. In coordination with Codes and Standards, develop a baseline inventory of cities and Improvement over Improvement over counties within the baseline, over time baseline, overtime IOU territory with adopted model reach codes c) Program Design to Overcome Barriers: Refer to individual partnership PIP section. Item 9. - 43 xB -276- 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan d) Quantitative Program Objectives: Program Target by Program Target by Program/Element 2013 2014 Target#1 N/AN/AN/A N/AN/AN/A Target#2 N/AN/AN/A N/AN/AN/A Target#3 N/AN/AN/A N/AN/AN/A Target#4 N/AN/AN/A N/AN/AN/A Refer to individual partnership PIP section. 6- Other Program Element Attributes—Element B-Strategic Plan Support a)Best Practices SoCalGas approach to Strategic Plan Support is innovative and reflects lessons learned because SoCalGas has observed that multiple actors provide governments with long-term GHG reduction and energy reduction strategies. SoCalGas has learned from previous programs that it is more important for governments to have access to tools and technical assistance to become informed energy actors rather than directly performing all functions themselves. b) Innovation The Strategic Plan Support element is inherently innovative since these elements have not been a part of previous Government Partnership program. c)Interagency Coordination The Strategic Plan Support element affords many opportunities for CEC,ARB and PIER coordination especially as communities look towards AB32 implementation and Title 24 compliance and development of climate action plans. Government Partnerships who include Strategic Plan Support elements in their program will look to align the goals of their respective communities around the goals of the Strategic Plan through education and outreach campaigns, peer-to-peer support and by providing technical assistance around compliance issues with these agencies. d) Integrated/coordinated Demand Side Management The Strategic Plan Support program element will achieve coordination of demand side management, low income efficiency, and workforce training. Peer to peer support will serve as a catalyst for integration by providing a platform for knowledge sharing. In this way, there is an opportunity to expose all peer to peer participants to all utility program offerings in an integrated fashion. e) Integration across resource types (energy,water, air quality, etc) Ns -277- Item 9. - 44 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan This program element integrates other resources, especially regarding guiding documents, which necessarily should include resource types such as waste, land use, water. While government Partnerships are designed to focus on energy efficiency, SoCalGas can encourage partnerships to access other resources and can also emphasize when energy programs have incidental benefits to other resources. See individual PIPs for more specific information. f)Pilots Individual LGPs may choose to implement pilots related to this element. See individual PIPs for more specific information. g) EM&V A process evaluation will be conducted by a third party evaluator. The evaluation will assess communication and coordination effectiveness between partners as well as satisfaction with the service and increased awareness of energy efficiency opportunities. A combination of interviews and focus groups will likely be used to collect data. The evaluation is expected to build upon results found in the recently completed process evaluation for PY2006 to 2008. Element C- Core Program Coordination 4—Program Element Description and Implementation—Element C- Core Program Coordination C. Core Pro ram Coordination C1- Outreach Education C2 - Third Party Program Coordination C3 - Technical Assistance Overview The Core Program Coordination element will be implemented to some degree by all of the unique individual Local Government Partners (LGPs). This section(4C—6C) describes the standard overview, rationale, outcomes, and barriers associated with the Core Program Coordination element by an LGP. If an individual LGP has a distinctive approach to Core Program Coordination, that LGPs individual PIP will contain additional information. Coordination with Core programs is important to the effectiveness of each individual LGP. A key to SoCalGas coordination effort is its market segment planning approach. This means that LGPs will be.coordinated with all other energy efficiency portfolio efforts to reach agricultural, commercial, industrial, residential and small business customers. In addition, LPGs will promotelhe EUC—WHUP in 2013-14 through collaboration with local EUC - WHUP stakeholders to support marketing and outreach. LGPs will continue to coordinate with local regional efforts such as the County of Santa Barbara, County of Los Angeles, and other local governments engaged in regional efforts that support EUC -WHUP.. LGPs will continue work which has been in progress during 2010-12 doing public workshops to promote EUC- WHUP. to the community as well as supporting recruitment of contractors. Item 9. - 45 HB -278- 2013-2014 Energy Efficiency Programs Focal Government Partnership Program Program Implementation Plan In addition, LGPs coordinate with each other, with SoCalGas, and with other implementers to support energy efficiency programs across the SoCalGas portfolio, and particularly with respect to outreach education for residential and small business customers, third party programs, and technical assistance. By utilizing the outreach channels of the local government, these programs target customers and fully canvas neighborhoods that may not be targeted by Core Programs. LGP's that have close ties to Business Improvement Districts(BID's) will coordinate marketing outreach and education of Core Commercial Programs by; 1. Engaging BIDs through leveraging and working with LG Partners 2. Working with BIDs to reach out to small and medium businesses to deliver relevant Training& Education and to funnel Core Program and/or Third Party Program offerings. 3. Collaborating and leveraging all local and utility resources to deliver cost effective and targeted EE measures In a continued effort to insure that customers and energy efficiency opportunities are not overlooked, LGPs will also have the opportunity to participate in a program to provide energy efficiency to moderate income customers slightly above the LIEE guideline or to customers who are unable to produce the necessary LIEE documentation. Because of their close ties to the community, individual LGPs may identify opportunities to serve customer energy needs through integrated demand side management products including energy efficiency, demand response, low income programs, and codes and standards assistance as well as other utility programs including distributed generation. Such coordination provides customers with comprehensive solutions and minimizes overlap of effort and service. Where the LGP identifies a need that they do not currently service,they can refer participants to programs. The Partnership will provide the participant with contact information for the relevant programs and assistance as required. If program overlap is determined to exist,the Partnership will notify SoCalGas of the program(s)involved and discuss and coordinate efforts so as not to duplicate services and compete for customers. In addition, LGPs can coordinate with and leverage other sources of funding to increase the impact of SoCalGas offerings and include programs provided by other agencies such as the CEC, ARB and other state and federal agencies. In addition to outreach for energy efficiency opportunities, LGPs are an important delivery channel for integrated approaches and emerging technologies. As new approaches of integration and emerging technologies are available, the LGPs will serve as a channel for providing the appropriate outreach and education to the community. C1 - Outreach and Education LGPs will provide education and outreach to inform their customers about comprehensive energy saving opportunities and best practices. A key focus for support from LGPs will be EUC -WHUP. All of the outreach will be coordinated with SoCalGas marketing efforts and statewide marketing energy efficiency marketing initiatives. xB -279- Item 9. - 46 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan As part of the coordination of Training and Education, the LGPs will leverage trainings at SoCalGas Energy Resource Center, SCE's CTAC and other resources. C2 - Third Party Program Coordination LGPs will coordinate with Third Party direct install contractors and/or other core programs to implement retrofits of existing government buildings and municipal facilities. The contracts will be coordinated with the LGPs by establishing agreements between the contractors and the GPs that specify which customers and in which geographic areas each contractor is eligible to serve. Contractors will be selected to provide focus on targeted customers as well as specialization in strategic technologies such as HVAC tune-ups and replacement projects. C3—Technical Assistance Technical assistance is available to LGPs. Assistance many include but is not limited to audits, engineering calculations, reports and inspections. Target Audience Community level data will be analyzed to determine the areas with the largest potential based on market potential studies and looking at previously served customers. Cl - Outreach and Education The primary audience for outreach and education includes the following: • Local Government Partners • Government and agency employees • Community based organizations • Energy Upgrade California—Whole Home Upgrade California Contractors • SoCalGas customers • Building engineers C2 - Third Party Program Coordination Individual LGPs will coordinate closely with the third parties providing the direct install implementation. In addition, each individual LGP will be trained in the programs offered by the third parties so that they may coordinate and/or refer customers to these programs. For example, third party coordination may be appropriate for more specialized technologies or specific target segments. C3—Technical Assistance The target audience for technical assistance includes local government partners, SoCalGas customers, and contractors. Implementation Cl - Outreach and Education Item 9. - 47 HB _280_ 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan Objectives of the LGPs include leveraging marketing from existing core and statewide programs to provide a consistent and cost effective approach. Because LGPs best understand the needs of their community,the LGPs will tailor offerings to the community_and implement programs through community outreach. LGPs will also work with local governments and quasi-governments to develop an education curriculum and schedule that will engage their communities to advance energy efficiency and sustainability. LGPs will coordinate and support efforts to promote EUC throughout territory shared with SCE, and PG&E. Partnerships will leverage the resources of the SoCalGas Energy Resource Center. Some individual LGPs may develop training materials for adopting and implementing local energy initiatives or may utilize such materials developed under the SEEC Program. Partnerships will also develop workshop topics, schedule workshops in key locations, arrange for workshop presenters, coordinate workshop materials, market workshops to local governments, and facilitate workshops C2 -Third Party Program Coordination LGPs using third party direct install programs will coordinate with third party direct install contractors to determine which areas of the community should be the focus of the direct install contractors marketing efforts. The direct install contracts will be coordinated with the LGPs by establishing agreements between the contractors and the LGPs that specify which customers and geographic areas each contractor is eligible to serve. This method provides a more orderly approach to using the limited number of contractors to reach the widest population in the state in a consistent manner. Each direct installation implementer will work with their assigned LGP to develop a marketing strategy for their assigned LGP territory. Each LGP with Direct Install element in their program will have a direct install budget that will augment the third party contract funds. Each project implemented and coordinated within a LGP community will be funded by the GP program and the associated savings will be allocated to the GP. C3—Technical Assistance Technical assistance is available to LGPs to provide audits, engineering calculations, reports and inspections. Additionally, partnerships will take a strategic market plan approach to address the customers with the largest potential or the biggest need. These efforts will be conducted with other third party and Core programs. S-Program Element Rationale and Expected Outcome—Element C Core Program Coordination a) Quantitative Baseline and Market'Transformation Information Market Transformation(MT)metrics proposed in Tables 3 and 4 are preliminary. The proposed metrics are meant to initiate a collaborative effort to elaborate meaningful metrics that will provide overall indicators of how markets as a whole are evolving. MT metrics should neither be used for short-term analyses nor for specific program analyses; rather, should focus on broad market segments. HB -281- Item 9. - 48 i 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan Market transformation is embraced as an ideal end state resulting from the collective efforts of the energy efficiency field,but differing understandings of both the MT process and the successful end state have not yet converged. The CPUC defines the end state of MT as "Long-lasting sustainable changes in the structure or functioning of a market achieved by reducing barriers to the adoption of energy efficiency measures to the point where further publicly-funded intervention is no longer appropriate in that specific market."31 The Strategic Plan recognizes that process of transformation is harder to define than its end state, and that new programs are needed to support the continuous transformation of markets around successive generations of new technologies 32. Market transformation programs differ from resource acquisition programs on 1) objectives, 2) geographical and 3) temporal dimensions, 4) baselines, 5) performance metrics, 6) program delivery mechanisms, 7)target populations, 8) attribution of causal relationships, and 9)market structures33. Markets are social institutions34, and transformation requires the coordinated effort of many stakeholders at the national level, directed to not immediate energy savings but rather to intermediary steps such as changing behavior, attitudes, and market supply chains35 as well as changes to codes and standards. Resource acquisition programs rely upon the use of financial incentives, but concerns have been raised that these incentives distort true market price signals and may directly counter market transformation progress 36.According to York 7, "Market transformation is not likely to be achieved without significant,permanent increases in energy prices. From an economic perspective,there are 3 ways to achieve market transformation: (1) fundamental changes in behavior, (2) provide proper price signals, and(3)permanent subsidy." The question of what constitutes successful transformation is controversial because of a Catch-22: Market transformation is deemed successful when the changed market is self- sustaining,but that determination cannot be made until after program interventions are ended. Often, however, the need for immediate energy and demand savings or immediate carbon-emissions reductions will mean that program interventions may need to continue, which would interfere with the evaluation of whether MT is self-sustaining. Market transformation success has also been defined in terms of higher sales of efficient measures than would have otherwise occurred against a baseline absent of program interventions. The real world, however,provides no such control condition. Evaluators must estimate these 31 California Public Utilities Commission Decision,D.98-04-063,Appendix A. 32 California Public Utilities Commission(2008)California Long Term Energy Efficiency Strategic Plan,p.5.Available at http://www.califomiaenergyefficiency.com/docs/EEStrategiePlan.pdf 33 Peloza,J.,and York,D.(1999)."Market Transformation:A Guide for Program Developers."Energy Center of Wisconsin. Available at:http://www.eew.org/eewresults/189-I.pdf 34 Blumstein,C., Goldstone,S.,&Lutzenhiser,L.(2001)"From technology transfer to market transformation'.Proceedings of the European Council for an Energy Efficient Economy Summer Study.Available at http://www.eceee.org/conference_proceedings/eceee/200 I/Panel_2/p2_7/Paper/ 35 Sebold,F.D.,Fields,A., Skumatz,L.,Feldman,S.,Goldberg,M.,Keating,K.,Peters,J.(2001)A Frameworkfor Planning and Assessing Publicly Funded Energy Efficiency.p.6-4.Available at www.cahnac.org. 36 Gibbs,M.,and Townsend,J.(2000).The Role of Rebates in Market Transformation: Friend or Foe.In Proceedings from 2000 Summer Study on Energy Efficiency in Buildings. 37 York,D.,(1999)."A Discussion and Critique of Market Transformation",Energy Center of Wisconsin.Available at http://www.eew.org/eewresults/186-I.pdf Item 9. - 49 1413 -282- 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan baselines from quantitative factors such as past market sales that may be sparse and/or inaccurate-particularly for new products. Evaluations must also defer to expert judgments on what these baselines may have been as well as on the degree of successful market transformation 38. Due to the subjective nature of these judgments, it is imperative that baselines as well as milestone MT targets be determined and agreed upon through collaborative discussion by all stakeholders, and these targets may need periodic revision as deemed necessary by changing context. Market transformation draws heavily upon diffusion of innovation theory39,with the state of a_market usually characterized by adoption rate plotted against time on the well-known S- shaped diffusion curve. In practice, however, the diffusion curve of products may span decades40. Market share tracking studies conducted 3, 5 or even 10 years after the start of an MT program may reveal only small market transformation effects41. The ability to make causal connections between these market transformation effects and any particular program's activities fades with time, as markets continually change and other influences come into play. These challenges mentioned above are in reference to programs that were specifically designed to achieve market transformation; and these challenges are only compounded for programs that were primarily designed to achieve energy and demand savings. However, since the inception of market transformation programs almost two decades ago, many lessons have been learned about what the characteristics of successful MT programs are. First and foremost, they need to be designed specifically to address market transformation. "The main reason that(most)programs do not accomplish lasting market effects is because they are not designed specifically to address this goal (often because of regulatory policy directions given to program designers.)42"The Strategic Plan recognizes that regulatory policies are not yet in place to support the success of market transformation efforts 43,but also reflects the CPUC's directive to design energy efficiency programs that can lay the groundwork for either market transformation success or for codes and standards changes. Above all else, the hallmark of a successful market transformation program is in the coordination of efforts across many stakeholders. The most successful MT programs have involved multiple organizations,providing overlapping market interventions44. The Strategic Plan calls for coordination and collaboration throughout, and in that spirit the utilities look forward to working with the CPUC and all stakeholders to help achieve market transformation while meeting all the immediate energy, demand, and environmental needs. Drawing upon lessons learned from past MT efforts, the Energy Center of Wisconsin's guide 38 Nadel,S.,Thome,J., Sachs,H.,Prindle,B.,and Elliot,R.N.(2003)."Market Transformation: Substantial Progress from a Decade of Work."American Council for an Energy-Efficient Economy,Report Number A036.Available at: http://www.accee.org/pubs/a036UI.pdf 39 Rogers(1995)Diffusion of Innovations,5th Ed. 40 Example in bottom chart of this graphic from NYTimes: http://www.nytimes.com/imagepages/2008/02/1 O/opinion/l Oop.graphic.ready.html 41 Sebold et al(2001)p.6-5, 42 Peters,J.S.,Mast,$.,Ignelzi,P.,Megdal,L.M.(1998).Market Effects Summary Study Final Report. Volume 1."Available at http://calmac.org/publications/19981215CADOOOIME.PDF. 43 CPUC(2008)Strategic Plan,p.5. 44 Nadel,Thorne,Saches,Prindle&Elliot(2003). HB -283- Item 9. - 50 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan for MT program developers45 suggests that the first step is not to set end-point defmtions, progress metrics or goals. Rather, the first steps include forming a collaborative of key participants. As the Strategic Plan suggests, these may include municipal utilities, local governments, industry and business leaders, and consumers. Then, with the collective expertise of the collaborative, we can define markets, characterize markets, measure baselines with better access to historical data, and define objectives, design strategies and tactics, implement and then evaluate programs. The collaborative will also provide insights that will set our collective expectations for the size of market effects we can expect,relative to the amount of resources we can devote to MT. No one organization in the collaborative will have all the requisite information and expertise for this huge effort. This truly needs to be a collaborative approach from the start. The metrics and baselines described below in Tables 2 and 3 are presented for the purposes of starting the much-needed discussion between all key participants. These are suggestions, intended to allow key participants to pilot-test processes for establishing baseline metrics, tracking market transformation progress, and for refining evaluation tools. Early trial of these evaluation metrics will reveal any gaps in data tracking so that we may refine our processes before full-scale market transformation evaluations take place. The set of metrics we selected is intentionally a small set, for several reasons. First, as mentioned, the full set of metrics and baselines need to be selected by key participants. Second, we anticipate that market share data for many mid- and low-impact measures will be too sparse to show MT effects and not cost-effective to analyze. Third, we selected core measures and metrics that would both be indicative of overall portfolio efforts. These measures are also likely to be offered on a broad level by other utilities, providing a greater base of sales and customer data that could be analyzed for far-reaching MT effects. Therefore, for the Local Government Partnerships the following approach to quantitative baseline and market transformation information is presented as follows. The utilities recommend development of a baseline, and tracking the number of cities, counties and government institutions that have plans for written energy efficiency provisions. Such a metric relates directly to the Strategic Plan(Goal 12.3.4) in terms of measuring progress towards 50%plans for sustainability. In addition, we propose tracking community adoptions of new construction model reach codes,both residential and nonresidential. This metric aligns with the Strategic Plan(Goal 12.3.1). In addition to being a direct indicator of support by local government partnerships, community adoptions of model reach codes are of strategic interest to the CPUC. A proliferation of dissimilar reach codes would confuse the market relative to building codes and incentive programs. Model reach codes to be developed by Codes and Standards would allow energy efficiency efforts across partners to be aligned with a clear target for each climate zone. As discussed in the Local Government PIPs, the IOUs intend to work closely 45 Mom&York,(1999). Item 9. - 51 HB -284- 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan with partners in establishing baseline code compliance levels and pushing for model reach codes. With this discussion in mind, IOUs propose the following metrics for this sector: Baseline Metric Metric A Metric B Baseline inventory of cities, counties and government institutions within the IOU territory that have adopted such Energy Efficiency energy planning N/A Action Plans documents as Energy Action Plans, Climate Action Plans and Sustainability Plans, and General Plans with energy or climate elements. In coordination with Codes and Standards, develop a baseline Model Reach Codes inventory of cities and counties within the IOU territory with adopted model reach codes e) Market Transformation Information As stated above,market transformation draws heavily upon diffusion of innovation theory, with the state of a market characterized by adoption rate plotted against time on the well- known S-shaped diffusion curve. In practice,however, the diffusion curve of products may span decades. Market share tracking studies conducted 3, 5 or even 10 years after the start of an MT program may reveal only small market transformation effects. Therefore it is problematic, if not impractical, to offer internal annual milestones towards market transformation sectors and specific program activities. As a consequence, it is not appropriate to offer more than broad and general projections. Any targets provided in the following table are nothing more than best guesstimates, and are subject to the effects of many factors and market forces outside the control of program implementers. 1413 -285- Item 9. - 52 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan Internal Market Transformation Planning Estimates 2013 2014 Baseline inventory of cities, counties and government institutions within the IOU territory that have adopted such energy Improvement over Improvement over planning documents as baseline, over time baseline, over time Energy Action Plans, Climate Action Plans and Sustainability Plans, and General Plans with energy or climate elements. In coordination with Codes and Standards, develop a baseline inventory of cities and Improvement over Improvement over counties within the baseline, over time baseline, over time IOU territory with adopted model reach codes a) Program Design to Overcome Barriers: Refer to individual partnership PIP section. b) Quantitative Program.Objectives: Program Target by Program Target by Program/Element 2013 2014 Target#1 N/AN/A N/AN/A Target#2 N/AN/A N/AN/A Target#3 N/AN/A N/AN/A Target#4 N/AN/A N/AN/A Refer to individual partnership PIP section. 6- Other Program Element Attributes—Element C Core Program Coordination Item 9. - 53 1413 -286- 2013-2014 Energy Efficiency Programs Focal Government Partnership Program Program Implementation Plan Other Program Element Attributes CORE Program Coordination a)Best Practices: Describe why program This program element incorporates lessons learned element approach constitutes"best from previous partnerships. Close coordination practice" or reflects"lessons learned" in with Core and 3rd Party programs is integral for market strategies, program design and/or success. See EM&V section for future implementation techniques, or past documentation of best practices. experience. Provide references where available. b)Innovation: Describe any unique or This program element is unique because it takes innovative aspects of program element not coordination to a new level from the 2006-2008 previously discussed. Why is this cycle. Government Partnerships will work with innovative? Core programs, 3rd Party programs to develop a strategic market segment plan. This plan will identify largest opportunities for cost-effective energy savings, address barriers, share best practices and efficiently allocate resources. Partnerships will use education and outreach channels to inform their customers about energy savings opportunities and share best practices within partnerships. c)Interagency Coordination: Describe any Core program integration will require strong interagency coordination with the ARB, coordination with outside agencies. As CEC on PIER or Codes and Standards; communities look to retrofit buildings and perform non-utility market initiatives; energy education and outreach, coordination with other efficiency market forces, opportunities and governmental agencies will be a priority. A trends; and timeline by which market strategy will be to identify partnership segment will be"transformed" or other opportunities with the various agencies and aspects of the program. beginning to align our goals. On the community level, as local govermnents begin to think about AB32 implementation, GHG emission reduction opportunities will be indentified by modeling usage, past program participation and other trends. HB -287- Item 9. - 54 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan Other Program Element Attributes CORE Program Coordination d)Integrated/coordinated Demand Side In line with the Integration chapter of the Strategic Management: Describe how program will Plan,partnerships will begin to adopt an integrated achieve integrated or coordinated delivery strategy for delivering demand response and self- of all DSM options, as well as LIFE and generation programs. Partnerships will work to WET. (If this is an integral part of the develop working groups to enable the most program element and fully covered under effective delivery method of the various programs. #4 note that here.)Describe in detail how Workforce education and training initiatives will program will achieve integrated or build capacity at the community level. coordinated delivery,of all DSM options (energy efficiency, demand response, and onsite generation)where applicable including integrated program design and delivery, shared budgets, program evaluation, and incentive mechanisms that promote greater integration of DSM resources. Provide a complete description for all the technologies, including integration supporting technologies that will be included in the program. If the program does not include all DSM options as noted above, briefly provide an explanation for a more limited subset of DSM technologies. Utilize Attachment 5A to highlight any shared or leveraged budget categories and amounts (admin, incentives, ME&O, and other applicable categories). e) Integration across resource types Several partnerships have worked with various (energy, water, air quality, etc): If program water, air quality and transportation agencies to aims to integrate across resources types, provide integrated offerings. By coordinating with provide rationale and general approach. (If LIFE programs and other agency programs, certain this is an integral part of the program partnerships plan to work closely with other element and fully covered under#4 note agencies and look for further opportunities. that here. f)Pilots: Describe any pilot projects that Partnerships will look at their government are part of this program (If this was fully facilities in a strategic and prioritized manner. covered under#4, note that here.) Item 9. - 55 HB -288- 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan Other Program Element Attributes CORE Program Coordination g)EM&V: Describe any process evaluation A process evaluation will be conducted by a third or other evaluation efforts that will be party evaluator. The evaluation will assess undertaken by the utility to determine if the communication and coordination effectiveness program is meeting its goals and between partners as well as satisfaction with the objectives. Include the evaluation service and increased awareness of energy timeframe and brief description of scope, efficiency opportunities. A combination of as well as a summary of specific interviews and focus groups will likely be used to methodologies, if already developed. If not collect data. The evaluation is expected to build developed, indicate the process for upon results found in the recently completed developing them. Include reference to process evaluation for PY2006 to 2008. tracking databases that will be used for evaluation purposes. Element D—Unique Program Element-Local Government Regional Resource Program: 4—Program Element Description and Implementation—Element D—Local Government Regional Resource Program D. Unique Program Element D1-Government Facilities D2-Technical Assistance D3-Financing D4-Peer to Peer Support HB -289- Item 9. - 56 2013-2014 Energy Efficiency Programs Focal Government Partnership Program Program Implementation Plan Overview Local government struggle with securing energy/sustainability resources, and current budget conditions make the availability of such resources unlikely in the foreseeable future. The Local Government Regional Resource Program is a"virtual center" approach which is an expansion to our current Local Government Partnership program offerings. The Program will commence in one region initially with the intent to roll out service territory wide in 2013-14 program cycle. The program will support local governments (both partners and non-partners) and intends to drive increased comprehensive energy efficiency and will create deep.energy savings by local governments by complimenting and leveraging resources as well as filling gaps that currently exist within local government organizations, CEC, PUC and SoCa1Gas energy efficiency programs. These gaps prevent local government from successfully implementing higher value energy efficiency projects that demonstrate energy efficiency leadership to the community and increase community wide energy efficiency participation. Lessons learned from past partnership initiatives have identified the need for improvement in resources that provide cost-effective, on demand energy management services, and expertise to enable local governments to create responsive, sustainable, and widespread public sector energy management results. The"virtual center" approach will provide turnkey resources through hands on support, results oriented energy management, and augmenting existing Local Government Partnerships.A suite of resources shall include resources such as, but not limited to: • Project management support • Engineering and analytical support • Library of boiler plate agreements and templates that can support local government with the RFP process as well as assistance securing financing from various sources Providing these resources will result in improved energy management activity and increased program participation through energy efficiency and financing programs. DI-Government Facilities The Local Government Regional Resource Program supports the Government Facilities element by helping to provide technical resources for energy action for local governments augmenting existing partnership resources that will result in improved energy management activity and increased program participation through energy efficiency and financing programs. D2-Technical Assistance Resources such as engineering and analytical support, project development and management will be provided through a turnkey approach. D3-1 inancin� Local governments often have limited funding and technical resources to secure financing for energy efficiency projects. The Local Government Regional Resource Program intends to Item 9. - 57 HB -290- 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan provide support to establish resources for securing financing for energy projects from various sources. D4-Peer-to-Peer Support The Local Government Regional Resource Program offering will include information sharing through peer-to-peer learning. Partnership Program Advancement of Strategic Plan Goals and Objectives The table below shows which partner is addressing each strategic planning goal. Please refer to individual local government sub PIP's for more detail of each individual partner's advancement of the strategic goal. a a a a L L ` N L N C1. N y CV C y C Q 0 a c n°. a a N C d y N A O a f�0 f�0 a Cco W N C NL L N = OC C7=V t C ar In wCN) Or WQ i � U Jc y y ? Womo 3 4) UStrate is Planning o U a w a a a.14 Develop, adopt and implement model building energy codes (and/or other green codes) more stringent than Title 24's Yes Yes Yes Yes No No requirements, on both a mandatory and voluntary basis; adopt one or two additional tiers of increasing stringency. 1-2: Establish expedited permitting and entitlement approval processes,fee structures and other Yes Yes Yes Yes No No incentives for green buildings and other above-code developments. 1.3: Develop, adopt and implement model point-of- sale and other point-of No No No No No No transactions relying on building ratings. 1.4: Create assessment districts or other mechanisms so property owners can fund Yes Yes Yes No No No EE through city bonds and pay off on property taxes; HB -291- Item 9. - 58 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan 2 Q t m 0 c O a c C d a L m m c a y 0 c L° � m u1 N c U) T o a m m L c °' c a 9 C a p C _ rn Q � � m �� U -j U Ec N W o m coo cco M M m M coo W o coo 0 U Strategic Planning -1 Y iE a a a o U) U a o develop other EE financing tools. 1-5: Develop broad education program and peer-to-peer support to local govt's to Yes Yes Yes Yes No No adopt and implement model reach codes 1.6:1-ink emission reductions from"reach"codes and Yes Yes No Yes No No programs to ARB's AB 32 program 1-7: Develop energy efficiency-related"carrots and Yes Yes No Yes Yes No No sticks"using local zoning and development authority. 2-1: Statewide assessment of local government code Yes Yes No No No No No enforcement and recommendation for change. 2-2: Dramatically improve compliance with and enforcement of Title 24 building code, and of HVAC Yes Yes Yes No No No permitting and inspection requirements(including focus on peak load reductions in inland areas). 2-3: Local inspectors and contractors hired by local governments shall meet the requirements of the energy No No No No No No component of their professional licensing(as such energy components are adopted). 3-1:Adopt specific goals for efficiency of local government Yes Yes Yes Yes Yes No buildings. Item 9. - 59 H B -292- 2013-2014 Energy.Efficiency Programs Local Government Partnership Program Program Implementation Plan Q Q Q r r Q � 129 L c C G C N N C f.1 L t: G Qom) C :C 1° C o a c a a a c d m N U C c t`C t: MO �` N y W N C NO �Ql C C t .0 Q) N C to C C m p C.) N M � N U a N mt - CC U C 1° m W Et U ita ° ° 0 1° 'Strategic PlanningY a a M C.) a o 3-2: Require commissioning for new buildings,and re- commissioning and retro- Yes Yes No Yes No No No commissioning of existing buildings. 3-3: Improve access to favorable financing terms that create positive cash flow from Yes Yes Yes Yes Yes Yes energy efficiency/DSM savings 3-4: Explore creation of line item in LG budgets or other options that allow EE cost savings to be returned to the No No No No No No No department and/or projects that provided the savings to fund additional efficiency. 3-5: Develop innovation Incubator that competitively No No No No No No No selects initiatives for inclusion in LG pilot projects. 4-1: LGs commit to clean energy/climate change Yes Yes Yes Yes Yes Yes Yes leadership. 4-2: Use local governments' general plan energy and other elements to promote energy Yes Yes Yes Yes Yes Yes Yes efficiency,sustainability and climate change. 4-3:Statewide liaison to assist local govemments in energy efficiency, No No No No No No No No Yes No No sustainability, and climate change. 4-4: Develop local projects that integrate Yes No No No No No No EE/DSM/water/waste wate r end use 4-5: Develop EE-related "carrots" and"sticks"using Yes Yes Yes Yes Yes Yes HB -293- Item 9. - 60 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan A r E c0 y f0 N QEl 0 'S C ° a c °o a a y c a� d 7 C e6 t+ Mn �, N 12 W N T O 'fl d a d G 7 -O,, C Q 01 01 01t CL N (�} �t O U M Ct .. n. � C � m 12 U G1 4. e U W � CD C MC chi � r U E01 C w U t 2 tr WEmStrate is Planning CDaCna. ° 0Cna ' ayi o co U 00. o local zoning and development authority Element D—Individual Local Government Partnerships The Individual Local Government Partnerships are listed below: 1. County of Los Angeles Partnership 2. Kern County Energy Watch Partnership 3. Riverside County Partnership 4. County of San Bernardino Partnership 5. Santa Barbara County Energy Watch(North Santa Barbara) and(South County Santa Barbara) 6. South Bay Partnership 7. San Luis Obispo County Energy Watch Partnership 8. San Joaquin Valley Partnership 9. Orange County Cities Partnership 10. Statewide Energy Efficiency Collaborative(SEEC Partnership) 11. Community Energy Partnership (CEP) 12. Desert Cities Partnership 13 Ventura County Regional Energy Alliance Item 9. - 61 BB -294- 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan HB -295- Item 9. - 62 2013-2014 Energy Efficiency Programs Local Government Partnership Programs Program Implementation Plan Item 9. - 63 HB -296- Exhibit B 2013-14 SCG Orange County Cities Partnership Goal and Budget 2013-2014 Energy Savings (Gross Therm) 2013 2014 2-year Total SCG 40,000 Therm 40,000 Therm 80,000 Therm Other non-resource goals are contained in the SCG PIP in Exhibit A. SCG 2013-2014 OC Cities Partnership Total Non-Incentive Budget $271,938 SCG Authorized Budget SCG Administrative Other $90,687 SCG Administrative Overhead $12,949 Total Utility Authorized Budget $103,636 OC Cities Authorized Budget $168,302 2013-14 Total Non-incentive Program Budget $271,938 Projected Allocations for OC Cities Authorized Budget $168,302 2013 2014 Administration $10,000 $10,000 Marketing & Outreach $7,000 $7,000 Direct Implementation $67,151 $67,151 Note: Incentive is a part of SCG Core Program's Incentive Budget. The incentive level is $1.00 per therm for calculated measures. Incentives for deemed measures are in accordance with the incentive levels for the applicable SCG Core Programs. 2013-2014 Orange County Cities Energy Efficiency Partnership xB -297- Item 9. - 64 Esparza, Patty From: Klemm, Aaron Sent: Thursday, May 09, 2013 12:57 PM To: Esparza, Patty Subject: RE: Energy Leader Partnership Contracts SCE's should go back to: BernardAdebayo-Ige,PE., C.E.M.,LEED,AP Local Government Partnerships 1515 Walnut Grove Avenue,2nd Floor Rosemead, CA. 91770 Tel:(626)302-0418, Cell(626)4229807 PAX 20418 SCG's should go to: Ann Teall Southern California Gas Co. 555 W 5th Street, GT20B4 Los Angeles, CA. 90013 From: Esparza, Patty Sent: Thursday, May 09, 2013 8:57 AM To: Klemm, Aaron Subject: Energy Leader Partnership Contracts Hi Aaron —the Mayor has signed both SCG & SCE contracts. Will you please send me the name and address information where they should be mailed? Thanks! Patty Esparza, Cmc Senior Deputy City Clerk City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 (714) 536-5260 i City ®f Huntington Beach 2000 Main Street ® Huntington Beach, CA 92648 (714) 536-5227 ® wAw.huntingtonbeachca.gov Office of the City Clerk 0 ` Joan L. Flynn, City Clerk May 9, 2013 Ann Teall Southern California Gas Co. 555 W. 5th Street, GT20B4 Los Angeles, CA 90013 Dear Ms. Teall: Enclosed please find two originals of the "First Amendment" to the Agreement to jointly deliver the 2010-2013 Orange County Energy Leader Partnership Program. Upon execution by the all parties, please return one complete original back to.- Joan L. Flynn City Clerk 2000 Main Street Huntington Beach CA 92648 Your attention to this matter is greatly appreciated. Sincerely, Joan L. Flynn, CIVIC City Clerk JF: pe Enclosure: Agreements G:followup:agrmtltr Sister Cities: Anjo,Japan A Waitakere, New Zealand Council/Agency Meeting Held: Deferred/Continued to: l pr ve ❑ Co tionali A proved ❑ D Hied 'City 1- nature ounocil Meeting Date: 1/19/2010 Department ID Number: AD 10-002 CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: HONORABLE MAYOR AND CITY CO 1L MEMBERS SUBMITTED BY: FRED A. WILSON, CITY ADMINSTR PREPARED BY: BOB HALL, DEPUTY CITY ADMINIST ATO SUBJECT: AGREEMENT TO JOINTLY DELIVER ORANGE COUNTY CITIES ENERGY EFFICIENCY PARTNERSHIP PROGRAM Statement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s) Statement of Issue: The city of Huntington Beach and Southern California Edison Company (SCE) approved resolution 2009-09 and entered into a Local Government Energy Action Resources partnership in January 2009. SCE recently received Pubic Utilities Commission (PUC) approval for programs from 2010-2012. This agreement replaces the expiring prior agreement approved by council in January 2009. The council is asked to approve updated energy efficiency partnership agreements with SCE and Southern California Gas Company (SCG). Funding Source: N/A Recommended Action: Motion to: 1. Approve and authorize Mayor and City Administrator to execute Agreement to Jointly Deliver the 2010-2012 Orange County Energy Leader Partnership program between the City of Huntington Beach, California and Southern California Edison Company and the Orange County Cities Energy Efficiency Partnership Program by and among The City of Costa Mesa, The City of Huntington Beach, The City of Westminster and Southern California Gas Company Alternative Action(s): Do not approve the agreement and advise staff on how to proceed. 21, - r r REQUEST FOR CITY COUNCIL ACTION MEETING DATE: 1/19/2010 DEPARTMENT ID NUMBER: AD 10-002 Analysis: SCE and SCG have chosen to partner with Huntington Beach and other adjacent Orange County cities to implement an Orange County local government energy efficiency partnership. The partnership framework provides enhanced incentives for energy saving projects in city facilities, technical assistance and marketing, education and outreach funding to support Huntington Beach's energy and sustainability efforts in the community. The funds are Public Goods charge funds that SCE and SCG are required by the Public Utilities Commission (PUC) to collect. SCE administers these funds with PUC oversight to increase energy efficiency, eliminating the need to build new power plants. This contract will provide additional funds to the city when the city invests in energy savings projects in our facilities and infrastructure. This contract will extend the effectiveness of existing and planned Capital Improvement Project (CIP) funding that increases energy efficiency. Huntington Beach has received an award from the Federal government for $1.78M in energy efficiency projects. Strategic Plan Goal: Maintain, Improve, and Obtain Funding for Public Improvements Environmental Status: Not applicable for this action, but the agreement positively impacts the City of Huntington Beach's ability to reduce environmental impacts from energy use. Attachment(s): City Clerk's ' . s - o - No,. ® - o 0 - 1. Agreement to Jointly Deliver the 2010-2012 Orange County Energy Leader Partnership Program between the City of Huntington Beach, California and Southern California Edison Company. 2. Agreement to Jointly Deliver the 2010-2012 Orange County Cities EnergyEfficiency Partnership Program B and Amon The City of Y p 9 Y 9 Y Costa Mesa, The City of Huntington Beach, The City of Westminster and Southern California Gas Company. 3. Insurance and Indemnification Waiver Modification Request -2- 1/5/2010 9:57 AM ATTA CHMENT #2 AGREEMENT TO JOINTLY DELIVER THE 2010-2012 ORANGE COUNTY CITIES ENERGY EFFICIENCY PARTNERSHIP PROGRAM BY AND AMONG THE CITY OF COSTA MESA THE CITY OF HUNTINGTON BEACH THE CITY OF FOUNTAIN VALLEY THE CITY OF WESTMINSTER AND SOUTHERN CALIFORNIA GAS COMPANY DATED January 1,2010 This program is funded by California utility ratepayers and administered by the Utilities under the auspices of the California Public Utilities Commission 2010 12 Orange County Cities Partnership Program Agreement THIS AGREEMENT TO JOINTLY DELIVER THE 2010 2012 ORANGE COUNTY CITIES ENERGY EFFICIENCY PARTNERSHIP PROGRAM (the Agreement ) by and among the City of Costa Mesa the City of Fountain Valley the City of Huntington Beach the City of Westminster (the Cities ) and Southern California Gas Company ( SCG ) is effective as of January 1 2010 ( Effective Date ) SCG and the Cities may be referred to herein individually as a Party and collectively as the Parties WHEREAS on July 21 2008 as amended on March 2 2009 SCG submitted the Application ( Application ) for Approval of 2009 2011 Energy Efficiency Programs to the California Public Utilities Commission (the Commission ) to be delivered to SCG customers for the years 2009 through 2011 which included the SCG Local Government Partnership Program in which SCG will work with cities counties and other local government organizations to deliver the 2010 2012 Orange Cities Energy Efficiency Partnership Program(the Program )in the Cities within SCG service territory WHEREAS on October 1 2009 the Commission in D 09 09 047 authorized certain energy efficiency programs and budgets which include the SCG Local Government Partnership Program to be delivered to SCG customers for the years 2010 through 2012 including the Program WHEREAS the Cities has expressed commitments and has qualified to participate in the Program allowing the Cities to achieve immediate and long term energy savings in their own facilities and to demonstrate energy efficiency leadership in their communities while helping residents and businesses achieve sustainable reductions in energy use within SCG service territory WHEREAS the Program is designed to encompass several local government jurisdictions that include City of Costa Mesa City of Fountain Valley City of Huntington Beach and City of Westminster (the Cities ) WHEREAS the Parties desire to enter into an agreement that supersedes any and all previous agreements and sets forth the terms and conditions under which the Program shall be implemented with respect to the Parties NOW THEREFORE for valuable consideration the receipt and sufficiency of which is hereby acknowledged the Parties agree as follows 1 DEFINITIONS All terms used in the singular will be deemed to include the plural and vice versa The words herein hereto and hereunder and words of similar import refer to this Agreement as a whole including all exhibits or other attachments to this Agreement as the same may from time to time be amended or supplemented and not to any particular subdivision contained in this Agreement except as the context clearly requires otherwise Includes or including when used herein is not intended to be exclusive or to limit the generality of the preceding words and means including without limitation The word or is not exclusive 1 1 Agreement This document and all exhibits attached hereto and as amended from time to time 1 2 Amendment A future document executed by the authorized representatives of all Parties which changes or modifies the terms of this Agreement 2010 12 Orange County Cities Partnership Program Agreement I 3 Authorized Budget The Commission approved maximum budget for funding the performance of Authorized Work by all Parties of the Program as set forth in the Programs Implementation Plans 1 4 Authorized Work The work authorized by the Commission for the Program as set forth in this Agreement and as more fully described in the Program Implementation Plan and as agreed to be performed by the Parties 1 5 Business Day The period from one midnight to the following midnight excluding Saturdays Sundays and holidays 16 Calendar Day The period from one midnight to the following midnight including Saturdays Sundays and holidays Unless otherwise specified all days in this Agreement are Calendar Days 1 7 Contractor An entity contracting directly or indirectly with a Party or any subcontractor thereof subcontracting with such Contractor to furnish services or materials as part of or directly related to such Party s Authorized Work obligations 1 8 Customers or Eligible Customers Those customers eligible for 2010 2012 Program services which are SCG customers located within the jurisdiction of the Cities and may include the city itself 1 9 EM&V Evaluation Measurement and Verification of the Program pursuant to Commission requirements 1 10 Energy Efficiency Measure (or Measure) As used in the Commissions Energy Efficiency Policy Manual Version 4 August 2008 as may be supplemented or updated from time to time 1 11 Gas Surcharge The funds collected from gas utility ratepayers pursuant to Section 890 et al of the California Public Utilities Code for public purposes programs including energy efficiency programs approved by the Commission 1 12 Incentive As used in the Commission s Energy Efficiency Policy Manual Version 4 August 2008 as may be supplemented or updated from time to time 1 13 Partner Budget That portion of the Authorized Budget which represents the maximum budget and maximum allocation by period for funding the performance of the Program by the Cities and as set forth in Exhibit B subject to amendment by SCG consistent with the terms of this Agreement 1 14 Program Expenditures Actual (i e no mark up for profit administrative or other indirect costs) reasonable expenditures of the Cities that are pre approved directly identifiable to and required for the Authorized Work in accordance with Section 10 3 1 15 PIP or Program Implementation Plan The implementation plan specific to this Program together with SCG Local Government Partnership Master PIP which include the anticipated 2010 12 Orange County Cities Partnership Program Agreement 2 scope of the Program in SCG service territory approved by the Commission and attached hereto as Exhibit A 2 PURPOSE The Program is funded by California utility ratepayers and is administered by SCG under the auspices of the Commission The purpose of this Agreement is to set forth the terms and conditions under which the Parties will jointly implement the Program The work authorized pursuant to this Agreement is not to be performed for profit This Agreement is not intended to and does not form any partnership within the meaning of the California Uniform Partnership Act of 1994 or otherwise 3 PROGRAM DESCRIPTION 3 1 Overview The 2010 2012 Orange Cities Energy Efficiency Partnership Program is designed to provide integrated technical and financial assistance to help local governments effectively to increase energy efficiency reduce greenhouse gas emissions increase renewable energy usage protect air quality and ensure that their communities are more livable and sustainable The Program provides access to all SCG core programs to increase energy efficiency in local government facilities and their communities through energy saving actions including retrofitting their municipal facilities as well as providing opportunities for constituents to take action in their homes and businesses By implementing measures in Cities own facilities the Cities will build their local capacity for energy efficiency and sustamability as the Cities and SCG work together to increase community awareness of energy efficiency and position the Cities as leaders in sustainable energy management practices The Program will provide marketing outreach education and training to connect the community with opportunities to save energy money and help the environment The Parties will leverage the strengths of each other to efficiently deliver energy savings Delivering sustainable energy savings promoting energy efficiency lifestyles and achieving an enduring local government capacity for the Cities through this Program design is rooted in the effective relationship among the Cities their constituents and SCG 4 AUTHORIZED WORK 4 1 Scope The work authorized by the Commission is set forth broadly in the PIP and shall be performed pursuant to the terms of this Agreement The Parties shall collaborate and mutually agree upon specific Program implementation consistent with the PIP and the Parties shall document such details in a Planning Document which is intended to evolve throughout the term of the Program 42 Ob ecl fives The PY ogram is designed to meet the specific goals and milestones set forth in Exhibit B of this Agreement while implementing the Program strategies and meeting the general objectives and goals set forth in the PIP 2010 12 Orange County Cities Partnership Program Agreement 3 5 LIMITATION ON SERVICE TERRITORY—The Parties agree that Authorized Work shall only be performed in SCG service territory with energy savings claims applicable solely to SCG utility system No Authorized Work shall be performed for any customers that receive natural gas from a municipal utility corporation or other natural gas service provider or that do not directly receive gas service from SCG Nothing to this Section 5 is intended to preclude Program coordination with other municipal utilities 6 OBLIGATIONS OF THE PARTIES 6 1 Obligations of SCG and the Cities 6 1 1 Each Party will be responsible for the overall progress of its Authorized Work to ensure that the Program remains on target (including but not limited to achieving the Program s specific energy savings and demand reduction goals as set forth in Exhibit B) 6 1 2 The Parties shall jointly coordinate and prepare all Program related documents including all required reporting pursuant to Section 9 and any such other reporting as may be reasonably requested by SCG 6 1 3 To the extent practicable and with coordination by SCG the Parties shall use the Program as a portal for other existing or selected programs that SCG offers including programs targeting low income customers demand response self generation solar and other programs as described in the PIP with a goal to enhance consistency in rebates and other Program details minimize duplicative administrative costs and enhance the possibility that programs can be marketed together to avoid duplicative marketing expenditures 6 1 4 Consistent with those contained in the PIP SCG and the Cities will work together to develop and accomplish additional mutually agreeable goals 62 Obligations of the Cities 62 1 Each City shall appoint an Energy Champion who will be the primary contact among the City other Cities and SCG s Energy Efficiency Representative (defined in Section 6 3 1) and who will be authorized to act on behalf of the City in carrying out the City s obligations under this Agreement Such appointment shall be communicated in writing to SCG within 10 Business Days following execution of this Agreement 6 2 2 Each City shall communicate regularly with SCG s Energy Efficiency Representatives in accordance with Section 7 2 and 7 3 hereof and shall advise SCG immediately of any problems or delays associated with its Authorized Work obligations 6 2 3 The Cities shall perform their Authorized Work obligations within the Partner Budget and in conformance with the schedule and goals associated with such Authorized Work as set forth in this Agreement and shall furnish the required 2010 12 Orange County Cities Partnership Program Agreement 4 labor equipment and material with the degree of skill care and professionalism that is required by current professional standards 6 2 4 Each City will be actively involved in all aspects of the Program Each City will use its best efforts to (a) dedicate human resources necessary to implement the Program successfully (b) providing support for the Program marketing and outreach activities and (c) working to enhance communications with SCG to address consumer needs 6 2 5 The Cities shall obtain the approval of SCG when developing Program marketing materials and prior to their distribution publication circulation or dissemination in any way to the public In addition all advertising marketing or otherwise printed or reproduced material used to implement refer to or that is in any way related to the Program must contain the respective name and logo of SCG and at a minimum the following language This Program is funded by California utility ratepayers and administered by Southern California Gas Company under the auspices of the California Public Utilities Commission 6 2 6 The Cities shall obtain the approval of SCG prior to conducting any Program public outreach activities (exhibits displays public presentations canvassing etc) and any marketing materials used in connection with such outreach activity shall comply with the requirements of Section 6 2 5 6 2 7 The Cities shall submit to SCG upon its request all contracts agreements or other requested documents with the Cities Contractors (including subcontractors)performing Authorized Work in connection with the Program 6 2 8 Each City acknowledges and agrees that the Program has other cities as Parties under this Agreement and that no one City is entitled to the entire Authorized Budget and that the City shall work with SCG and each other Cities to achieve the goals and accomplish the Authorized Work of the Program 63 Obligations of SCG 6 3 1 SCG will appoint a Partnership representative ( SCG Energy Efficiency Representative ) who will be the primary contact for the Cities and who will be authorized to act on behalf of SCG in carrying out SCG s obligations under this Agreement Such appointment shall be communicated in writing to the Cities within 10 Business Days following execution of this Agreement 63 2 SCG will be actively involved in all aspects of the Program SCG will use good faith efforts to add value to the Program by (a) dedicating human resources necessary to implement the Program successfully and providing and maintaining a SCG presence in the Cities (b) providing support for the Program s marketing and outreach activities and (c) working to enhance communications with the Cities to address consumer needs and provide SCG information and services 6 3 3 SCG shall provide at no cost to the Cities informational and educational materials on SCG s core programs 2010 12 Orange County Cities Partnership Program Agreement 5 6 3 4 SCG shall be responsible for coordinating and ensuring compliance with all SCG reporting and other SCG filing requirements 64 EM&V Once the Commission has approved and issued an evaluation measurement and verification ( EM&V ) plan for the Program such EM&V plan shall be attached to this Agreement as Exhibit D and shall be incorporated herein by this reference Any subsequent changes or modifications to such EM&V plan by the Commission shall be automatically incorporated into Exhibit D The Cities shall provide and comply with all Commission/SCG s requests regarding activities related to EM&V The Cities and its Contractors shall cooperate fully with SCG s Energy Efficiency Representative and will provide all requested information if any to assure the timely completion of all EM&V Plan tasks requiring the Cities involvement or cooperation 7 ADMINISTRATION OF PROGRAM 7 1 Decision makm and nd Approval 7 1 1 Except as specifically provided in this Agreement the following actions and tasks require consent of both Parties a Any material modification to the Authorized Work in connection with the Program b Any action that materially impacts the agreed upon schedule for implementing the Program c Selection of any Contractor not previously approved by SCG 7 1 2 Unless otherwise specified in this Agreement the Parties shall document all material Program decisions including without limitation all actions specified in Section 7 1 1 above in meeting minutes or if taken outside a meeting through written communication which shall be maintained in hard copy form on file by the Parties for a period of no less than ten (10) years after the expiration or termination of this Agreement 72 Regular Meetings During the term of this Agreement the Cities Energy Champions of the Program and the SCG Energy Efficiency Representative along with such members of the Program team as the Parties deem necessary or appropriate shall meet monthly at a location reasonably agreed upon by the Parties In addition to any other agenda items requested by either Party the agenda shall include a review the status of the Cities performance against Partner Budget toward achievement of the goals set forth in Exhibit B and the Partnership s progress towards meeting overall Partnership goals set forth in the PIP Any decision making shall be reached and documented in accordance with the requirements of Section 7 1 above 73 Regular Communication Regular communication among Program representatives is critical for the long term success of the Program and achievement of Program goals and objectives Notwithstanding Section 7 2 above the Program representatives identified in writing by each Party pursuant to Sections 6 2 1 and 6 3 1 respectively shall communicate regularly with each other to review the status of the Program s goals deliverables schedules and budgets and plan for upcoming Program implementation activities and to advise the other Party of any problems associated with successful implementation of the Program Any decision making during 2010 12 Orange County Cities Partnership Program Agreement 6 this communication process shall be reached and documented in accordance with the requirements of Section 7 1 above 74 Non Responsibility for Other Party Notwithstanding anything contained in this Agreement in the contrary a Party shall not be responsible for the performance or non performance hereunder of the other Party nor be obligated to remedy any other Party s defaults or defective performance 8 DOUBLE DIPPING PROHIBITED In performing its respective Authorized Work obligations the Cities shall implement the following mechanism and shall take other practicable steps to minimize double dipping 8 1 Prior to providing incentives or services to an Eligible Customer the Cities and its Contractors shall obtain a signed form from such Eligible Customer stating that 8 1 1 Such Eligible Customer has not received incentives or services for the same measure from any other SCG program or from another utility state or local program and 8 1 2 Such Eligible Customer agrees not to apply for or receive incentives or services for the same measure from any other SCG program or from another utility state or local program Each Party shall keep its Customer signed forms for at least five (5) years after the expiration or termination of this Agreement 82 No Party shall knowingly provide an incentive to an Eligible Customer or make payment to a Contractor who is receiving compensation for the same product or service either through another ratepayer funded program or through any other funding source 8 3 Each City represents and warrants that it or its Contractors has not received and will not apply for or accept incentives or services for any measure provided for herein or offered pursuant to this Agreement or the Program from any other SCG program or from any other utility state or local program 84 The Parties shall take reasonable steps to minimize or avoid the provision of incentives or services for the same measures provided under the Program from another program or other funding source( double dipping ) 9 REPORTING 9 1 Reporting Requirements The Parties shall implement those reporting requirements set forth in Exhibit E attached hereto as the same may be amended from time to time or until the Commission otherwise requires or issues different or updated reporting requirements for the Program in which case and at which time such Commission approved reporting requirements shall replace the requirements set forth in Exhibit E in their entirety 2010-12 Orange County Cities Partnership Program Agreement 7 10 PAYMENTS 101 Partner Budget 10 1 1 Maximum Budget The Partner Budget is set forth in Exhibit B to this Agreement and represents the Cities maximum share of the Program s three year Authorized Budget Additionally Exhibit B sets forth the maximum non incentive budget on a periodic basis during the Program The Cities shall not be entitled to compensation in excess of the Partner Budget (either on a periodic basis or in total) without written authorization by SCG and receipt of a revised Exhibit B Consistent with Commission directives to maximize cost effectiveness and energy savings the Partner Budget set forth in Exhibit B may be reallocated or adjusted at any time by SCG in its sole discretion based upon SCG s evaluation of the Cities commitment to and progress toward the Cities energy savings goals set forth herein 10 1 2 Tracking SCG will track the Cities performance against the SCG goals and objectives set forth in Section 4 2 hereof including tracking (or estimating) achievement towards the specific energy savings goals set forth in Exhibit B The tracking will enable SCG to (i)report SCG Program status and achievement of respective goals and objectives (ii) confirm or amend SCG portion of the Partner Budget set forth in Exhibit B hereto based on the Cities performance of the SCG goals and objectives set forth in this Agreement 10 1 3 Partner Budget Adjustment The Parties acknowledge that this Program is offered in furtherance of the Commission s strategic energy efficiency goals for California and is based on the Cities commitment to attain such goals and its desire to provide leadership to its community To this end in the event that SCG determines in its sole discretion and through the tracking mechanism set forth in 10 1 2 above that the Cities is not performing in accordance with the goals and objectives set forth in this Agreement then SCG shall have the unilateral right to reduce eliminate or otherwise adjust the Partner Budget for the remaining Program year or years (other than for Program Expenditures previously approved by SCG) by amending Exhibit B and providing the amended Exhibit to the Cities Pursuant to this Section any such amended Exhibit B shall automatically be incorporated into this Agreement and take effect immediately upon delivery from SCG to the Cities 10 1 4 Partner Budget Categories a Non Incentive Budget The Partner Budget is comprised of a non incentive portion which includes separate categories for Marketing Education & Outreach Technical Assistance [and Direct Implementation] all of which are more fully described in the Program Implementation Plan b Incentive Budget SCG incentive budget in this Program is a part of incentive budget from its core programs The incentive level is up to $1 00 per therm for the calculated measures Other incentives for deemed 2010 12 Orange County Cities Partnership Program Agreement 8 measures are in accordance with the respective prescribed incentives for SCG core programs 102 Program Expenditures of the Cities The Cities with SCG s prior approval shall be entitled to spend Gas Surcharge funds within the limits of the Partner Budget on Program Expenditures The Cities shall not be entitled to reimbursement of Program Expenditures for any item(i)not specifically identifiable to the Program (n)not previously approved by SCG (in)not expended within the terms of this Agreement or (iv) not otherwise reimbursable under this Agreement 103 Payment to the City In order for the City to be entitled to Gas Surcharge funds for Program Expenditures 10 3 1 The City shall submit monthly activity reports to SCG in a format acceptable to SCG and containing such information as may be required for the reporting requirements set forth in Section 9 above( Monthly City Reports ) by the tenth (10`h) Calendar Day of the calendar month following performance setting forth all Program Expenditures 1032 The City shall submit to SCG together with any Monthly City Report a monthly invoice for reimbursement of reported Program Expenditures in a format acceptable to SCG attaching all documentation reasonably necessary to substantiate the Program Expenditures including without limitation the following a Contractor Costs Copies of all Contractor invoices If only a portion of Contractor costs applies to the Program the Cities shall clearly indicate the line items or percentage of the invoice amount that should be applied to the Program as provided in Exhibit E b Marketing Education & Outreach A copy of each distinct marketing material produced with quantity of a given marketing material produced and the method of distribution c Other expenditures As pre approved by SCG with sufficient documentation to support the expenditure d Allowable Costs Only those costs as listed in the Allowable Cost Table contained in the Reporting Requirements attached as Exhibit E can be submitted for payment All invoices submitted to SCG must report all costs using the allowable cost elements shown on the Allowable Cost Table Each City understands and acknowledges that all of its invoices for the Programs and the Monthly City Report shall be submitted to SCG 10 3 3 SCG reserves the right to reject any City invoiced amount for any of the following reasons 2010-12 Orange County Cities Partnership Program Agreement 9 a The invoiced amount when aggregated with previous Program Expenditures exceeds the amount budgeted in the Partner Budget for such Authorized Work(as set forth in Exhibit B) b There is a reasonable basis for concluding that such invoiced amount is unreasonable or is not directly identifiable to or required for the Authorized Work and/or the Program c The invoiced amount in SCG s sole discretion contains charges for any item not authorized under this Agreement or by the Commission or is deemed untimely unsubstantiated or lacking proper documentation 10 3 4 The Cities shall maintain for a period of not less than five (5) years all documentation reasonably necessary to substantiate the Program Expenditures including without limitation the documentation set forth in Section 10 3 2 above The Cities shall promptly provide upon the reasonable request by SCG any documentation records or information in connection with the Program or its Authorized Work 10 3 5 SCG shall review and either approve dispute or reject for payment the reported Program Expenditures within twenty (20) Calendar Days of receipt of the Monthly City Report and corresponding City invoice SCG shall pay all undisputed amounts after the ten (10) Calendar Day period described in Section 10 3 1 but within thirty (30) Calendar Days of receiving the Monthly City Report and corresponding City invoice 10 3 Payment of Incentives Payment of Incentives to the City shall be made in accordance with the applicable SCG s program requirements including terms and conditions and only after appropriate program documents have been submitted and approved and the appropriate inspections of each project or measure have been completed to SCG s satisfaction 104 Shifting Funds SCG may shift funds within the Authorized Budget among the Cities and/or may shift funds within Partner Budget among budget categories (Marketing Education & Outreach Direct Implementation and Incentives) which categories and budget amounts are set forth in Exhibit B Such shifting may be made by SCG to the maximum extent permitted under and in accordance with Commission decisions and rulings to which the Program relates 105 Reasonableness of Expenditures Each City shall bear the burden of ensuring that its Program Expenditures are objectively reasonable The Commission has the authority to review all Program Expenditures for reasonableness Should the Commission at any time issue a finding of unreasonableness as to any Program Expenditure and require a refund or return of the Gas Surcharge funds paid in the reimbursement of such Program Expenditure such City shall be solely liable for such refund or return 11 END DATE FOR PROGRAM AND ADMINISTRATIVE ACTIVITIES Unless this Agreement is terminated pursuant to Section 25 below or unless otherwise agreed to by the Parties or so ordered by the Commission the Parties shall complete all Program Administrative 2010-12 Orange County Cities Partnership Program Agreement 10 activities (as defined in the PIP) and all reporting requirements by no later than March 31 2013 and all Direct Implementation and Marketing&Outreach activities by no later than December 31 2012 12 FINAL INVOICES Each City must submit final invoices to SCG no later than February 28 2013 13 INDEMNITY 13 1 Indemnity y the Cities The Cities shall indemnify defend and hold harmless SCG and its respective successors assigns affiliates subsidiaries current and future parent companies officers directors agents and employees from and against any and all expenses claims losses damages liabilities or actions in respect thereof (including reasonable attorneys fees) to the extent arising from (a) the Cities negligence or willful misconduct in the Cities activities under the Program or performance of its obligations hereunder or (b) the Cities breach of this Agreement or of any representation or warranty of the Cities contained in this Agreement 13 2 Indemnityby SCG SCG shall indemnify defend and hold harmless the Cities and its respective successors assigns affiliates subsidiaries current and future parent companies officers directors agents and employees from and against any and all expenses claims losses damages liabilities or actions in respect thereof(including reasonable attorneys fees) to the extent arising from (a) SCG s negligence or willful misconduct in SCG s activities under the Program or performance of its obligations hereunder or (b) SCG s breach of this Agreement or any representation or warranty of SCG contained in this Agreement 13 3 LIMITATION OF LIABILITY NO PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT INCIDENTAL OR CONSEQUENTIAL DAMAGES WHATSOEVER WHETHER IN CONTRACT TORT (INCLUDING NEGLIGENCE) OR STRICT LIABILITY INCLUDING BUT NOT LIMITED TO LOSS OF USE OF OR UNDER UTILIZATION OF LABOR OR FACILITIES LOSS OF REVENUE OR ANTICIPATED PROFITS COST OF REPLACEMENT POWER OR CLAIMS FROM CUSTOMERS RESULTING FROM A PARTY S PERFORMANCE OR NONPERFORMANCE OF THE OBLIGATIONS HEREUNDER OR IN THE EVENT OF SUSPENSION OF THE AUTHORIZED WORK OR TERMINATION OF THIS AGREEMENT 14 OWNERSHIP OF DEVELOPMENTS The Parties acknowledge and agree that SCG on behalf of its Customers shall own all data reports information manuals computer programs works of authorship designs or improvements of equipment tools or processes (collectively Developments ) or other written recorded photographic or visual materials or other deliverables produced in the performance of this Agreement provided however that Developments do not include equipment or infrastructure purchased for research development education or demonstration related to energy efficiency Although the Cities shall retain no ownership interest or title in the Developments except as may otherwise be provided in this Agreement it will have a permanent royalty free non exclusive license to use such Developments subject to the confidentiality obligations of this Agreement 2010 12 Orange County Cities Partnership Program Agreement 11 15 DISPUTE RESOLUTION 15 1 Dispute Resolution Except as may otherwise be set forth expressly herein all disputes arising under this Agreement shall be resolved as set forth in this Section 15 152 Negotiation and Mediation The Parties shall attempt in good faith to resolve any dispute arising out of or relating to this Agreement promptly by negotiations between the Parties authorized representatives The disputing Party shall give the other Party written notice of any dispute Within twenty (20) Calendar Days after delivery of such notice the authorized representatives shall meet at a mutually acceptable time and place and thereafter as often as they reasonably deem necessary to exchange information and to attempt to resolve the dispute If the matter has not been resolved within thirty(30)Calendar Days of the first meeting any Party may initiate a mediation of the dispute The mediation shall be facilitated by a mediator that is acceptable to both Parties and shall conclude within sixty (60) Calendar Days of its commencement unless the Parties agree to extend the mediation process beyond such deadline Upon agreeing on a mediator the Parties shall enter into a written agreement for the mediation services with each Party paying a pro rata share of the mediator s fee if any The mediation shall be conducted in accordance with the Commercial Mediation Rules of the American Arbitration Association provided however that no consequential damages shall be awarded in any such proceeding and each Party shall bear its own legal fees and expenses 15 3 Confidentiality All negotiations and any mediation conducted pursuant to Section 15 2 shall be confidential and shall be treated as compromise and settlement negotiations to which Section 1152 of the California Evidence Code shall apply which Section is incorporated in this Agreement by reference 154 Iniunctive Relief Notwithstanding the foregoing provisions a Party may seek a preliminary injunction or other provisional judicial remedy if in its judgment such action is necessary to avoid irreparable damage or to preserve the status quo 15 5 Contmump, Oblipation Each Party shall continue to perform its obligations under this Agreement pending final resolution of any dispute arising out of or relating to this Agreement 156 Failure of Mediation If after good faith efforts to mediate a dispute under the terms of this Agreement as provided in Section 15 2 above the Parties cannot agree to a resolution of the dispute any Party may pursue whatever legal remedies may be available to it at law or in equity before a court of competent jurisdiction and with venue as provided in Section 15 2 16 REPRESENTATIONS AND WARRANTIES 16 1 Representation of both Parties Each Party represents and warrants as of the Effective Date and thereafter during the term of this Agreement that 16 1 1 The Authorized Work performed by a Party and/or its Contractors shall comply with the applicable requirements of all statutes acts ordinances regulations codes and standards of federal state local and foreign governments and all agencies thereof 2010 12 Orange County Cities Partnership Program Agreement 12 16 1 2 The Authorized Work performed by a Party and/or its Contractors shall be free of any claim of trade secret trade mark trade name copyright or patent infringement or other violations of any proprietary rights of any person 16 1 3 Each Party shall conform to the applicable employment practices requirements of(Presidential) Executive Order 11246 of September 24 1965 as amended and applicable regulations promulgated thereunder 161 4 Each Party shall contractually require each Contractor it hires to perform the Authorized Work to indemnify each other Party to the same extent such Party has indemnified each other Party under the terms and conditions of this Agreement 16 1 5 Each Party shall retain and shall cause its Contractors to retain all records and documents pertaining to its Authorized Work obligations for a period of not less than five(5)years beyond the termination or expiration of this Agreement 16 1 6 Each Party shall contractually require all of its Contractors to provide the other Parties reasonable access to relevant records and staff of Contractors concerning the Authorized Work 16 1 7 Each Party will maintain and may require its Contractors to maintain the following insurance coverage or self insurance coverage at all times during the term of this Agreement with companies having an A M Best rating of A VII or better or equivalent (1) Workers Compensation/Employer s Liability or Equivalent statutory minimum (n) Commercial General Liability $2 million minimum per occurrence/$4 million minimum aggregate (ui) Commercial or Business Auto (if applicable) $1 million minimum (iv) Professional Liability(if applicable) $1 million minimum 16 1 8 Each Party shall take all reasonable measures and shall require its Contractors to take all reasonable measures to ensure that the Program funds in its possession are used solely for Authorized Work which measures shall include the highest degree of care that such Party uses to control its own funds but in no event less than a reasonable degree of care 17 PROOF OF INSURANCE 17 1 Evidence of Insurance Upon request at any time during the term of this Agreement a Parry shall provide evidence that its insurance policies (and the insurance policies of any Contractor as provided in Section 16 8)are in full force and effect and provide the coverage and limits of insurance that the Party has represented and warranted herein to maintain at all times during the term of this Agreement 2010-12 Orange County Cities Partnership Program Agreement 13 172 Self Insurance If a Party is self insured such Party shall upon request forward documentation to the other Party that demonstrates to the other Party s satisfaction that such Party self insures as a matter of normal business practice before commencing the Authorized Work Each Party will accept reasonable proof of self insurance comparable to the above requirements 173 Notice of Claims Each Party shall immediately report to the other Party and promptly thereafter confirm in writing the occurrence of any injury loss or damage incurred by such Party or its Contractors or such Party s receipt of notice or knowledge of any claim by a third party of any occurrence that might give rise to such a claim over$100 000 18 CUSTOMER CONFIDENTIALITY REQUIREMENTS 18 1 Non Disclosure Subject to any disclosures required pursuant to the applicable Public Records Act the Cities its employees agents and Contractors shall not disclose any Confidential Customer Information (defined below) to any third party during the term of this Agreement or after its completion without the Cities having obtained the prior written consent of SCG except as provided by law lawful court order or subpoena and provided the Cities gives SCG advance written notice of such order or subpoena 182 Confidential Customer Information Confidential Customer Information includes but is not limited to a SCG customers name address telephone number account number and all billing and usage information as well as SCG customers information that is marked confidential If the City is uncertain whether any information should be considered Confidential Customer Information the City shall contact SCG prior to disclosing the customer information 183 Non Disclosure Agreement Prior to any approved disclosure of Confidential Customer Information SCG may require the City to enter into a nondisclosure agreement 184 Commission Proceedings This provision does not prohibit the Cities from disclosing non confidential information concerning the Authorized Work to the Commission in any Commission proceeding or any Commission sanctioned meeting or proceeding or other public forum 18 5 Return of Confidential Information Confidential Customer Information (including all copies backups and abstracts thereof)provided to the Cities by SCG and any and all documents and materials containing such Confidential Customer Information or produced by the Cities based on such Confidential Customer Information (including all copies backups and abstracts thereof) during the performance of this Agreement shall be returned upon written request by SCG 186 Remedies The Parties acknowledge that Confidential Customer Information is valuable and unique and that damages would be an inadequate remedy for breach of this Section 18 and the obligations of the Parties are specifically enforceable Accordingly the Parties agree that in the event of a breach or threatened breach of this Section 18 by such City SCG shall be entitled to seek and obtain an injunction preventing such breach without the necessity of proving damages or posting any bond Any such relief shall be in addition to and not in lieu of money damages or any other available legal or equitable remedy 19 TIME IS OF THE ESSENCE 2010 12 Orange County Cities Partnership Program Agreement 14 The Parties hereby acknowledge that time is of the essence in performing their obligations under this Agreement Failure to comply with milestones and goals stated in this Agreement including but not limited to those set forth in Exhibit B of this Agreementa do the PIP may constitute a material breach of this Agreement resulting in its termination payments being withheld Partner Budgets being reduced or adjusted funding redirected by SCG to other programs or partners or other Program modifications as determined by SCG or as directed by the Commission 20 CUSTOMER COMPLAINT RESOLUTION PROCESS The Parties shall develop and implement a process for the management and resolution of Customer complaints in an expedited manner including but not limited to (a) ensuring adequate levels of professional Customer service staff (b) direct access of Customer complaints to supervisory and/or management personnel (c) documenting each Customer complaint upon receipt and (d) directing any Customer complaint that is not resolved within five(5)Calendar Days of receipt by the Cities to SCG 21 RESTRICTIONS ON MARKETING 21 1 Use of Commissions Name No Party may use the name of the Commission on marketing materials for the Program without prior written approval from the Commission staff In order to obtain this written approval SCG must send a copy of the planned materials to the Commission requesting approval to use the Commission name and/or logo Notwithstanding the foregoing the Parties shall disclose their source of funding for the Program by stating prominently on marketing materials that the Program is funded by California ratepayers under the auspices of the California Public Utlities Commission 21 2 Use of SCG s Name The Cities must receive prior review and written approval from SCG in order to use SCG s name mark or logo on any marketing or other Program materials The Cities shall allow five (5) Business Days for SCG s review and approval If the Cities have not received a response from SCG within the five (5) Business Day period then it shall be deemed that SCG has disapproved such use 21 3 Use of the City s Name SCG must receive prior review and written approval from the City in order to use such City s name mark or logo on any marketing or other Program materials SCG shall allow five (5) Business Days for the City s review and approval If SCG has not received a response from the Cities within the five (5) Business Day period then it shall be deemed that the Cities has disapproved such use 22 RIGHT TO AUDIT The Parties agrees that the other Party and/or the Commission or their respective designated representatives shall have the right to review and to copy any records or supporting documentation pertaining to the their performance of this Agreement or the Authorized Work during normal business hours and to allow reasonable access in order to interview any staff of the Cities or SCG who might reasonably have information related to such records Further the Parties agrees to include a similar right of the other Party and/or the Commission to audit records and interview staff in any subcontract related to performance of the Authorized Work or this Agreement 2010-12 Orange County Cities Partnership Program Agreement 15 23 STOP WORK PROCEDURES SCG may suspend the Authorized Work being performed in its service territory for good cause including without limitation concerns relating to program funding implementation or management of the Program safety concerns fraud or excessive customer complaints by notifying the Cities in writing to suspend any Authorized Work being performed in SCG s service territory Any performance of Authorized Work by the Cities in SCG s service territory shall stop immediately and the Cities may resume its Authorized Work only upon receiving written notice from SCG that it may resume its Authorized Work 24 MODIFICATIONS Except as otherwise provided in this Agreement changes to this Agreement shall be only be valid through a written amendment to this Agreement signed by both Parties 25 TERM AND TERMINATION 25 1 Term This Agreement shall be effective as of the Effective Date Subject to Section 37 the Agreement shall continue in effect until March 31 2013 unless otherwise terminated in accordance with the provisions of Section 25 2 or 30 below Notwithstanding the June 30 2013 termination date all Direct Implementation and Marketing & Outreach activities shall be completed by no later than December 31 2012 in accordance with Section 11 of this Agreement In accordance with Sections 11 and 12 respectively all reporting and invoicing shall be completed by March 31 2013 252 Termination for Breach Any Parry may terminate this Agreement to the event of a material breach by the other Party of any of the material terms or conditions of this Agreement provided such breach is not remedied within sixty (60)days written notice to the breaching Party thereof from the non breaching Party or otherwise resolved pursuant to the dispute resolution provisions set forth in Section 15 herein 25 3 Effect of Termination Any termination by all of the Cities or by SCG shall constitute a termination of this Agreement in its entirety (subject however to the survival provisions of Section 37) 25 3 1 Subject to the provisions of this Agreement the Cities shall be entitled to Gas Surcharge Funds for all Program Expenditures incurred or accrued pursuant to contractual or other legal obligations for Authorized Work up to the effective date of termination of this Agreement provided that any Monthly City Reports or other reports invoices documents or information required under this Agreement or by the Commission are submitted in accordance with the terms and conditions of this Agreement The provisions of this Section 25 3 1 shall be a City s sole compensation resulting from any termination of this Agreement 25 3 2 In the event of termination of this Agreement in its entirety the Cities shall stop any Authorized Work in progress and take action as directed by SCG to bring the Authorized Work to an orderly conclusion and the Parties shall work 2010 12 Orange County Cities Partnership Program Agreement 16 cooperatively to facilitate the termination of operations and of any applicable contracts for Authorized Work 26 WRITTEN NOTICES Any written notice demand or request required or authorized in connection with this Agreement shall be deemed properly given if delivered in person or sent by facsimile nationally recognized overnight courier or first class mail postage prepaid to the address specified below or to another address specified in writing by a Parry as follows The Cities SCG City of Huntington Beach Southern California Gas Company Aaron Klemm Paulo Morais Energy Programs Supervisor 2000 Main Street 555 W Fifth Street GT28A4 Huntington Beach CA 92648 Los Angeles CA 90013 Tel (714)536 5537 Tel (213)244 3246 Fax (213)244 8252 City of Costa Mesa Daniel Baker Analyst 77 Fair Drive Costa Mesa CA 92626 Tel (714)754 5156 City of Fountain Valley Matt Mogensen Management Analyst City Managers Office 10200 Slater Ave Fountain Valley CA 92708 Tel 714 593 4412 City of Westminster Soroosh Rahban Building Official 8200 Westminster Blvd Westminster CA 92683 Tel (714) 898 3311 ext 250 2010-12 Orange County Cities Partnership Program Agreement 17 Notices shall be deemed received (a) if personally or hand delivered upon the date of delivery to the address of the person to receive such notice if delivered before 5 00 p in or otherwise on the Business Day following personal delivery (b) if mailed three (3) Business Days after the date the notice is postmarked (c) if by facsimile upon electronic confirmation of transmission followed by telephone notification of transmission by the noticing Party or (d) if by overnight courier on the Business Day following delivery to the overnight courier within the time limits set by that courier for next day delivery 27 CONTRACTS Each Party shall at all times be responsible for its Authorized Work obligations and acts and omissions of Contractors subcontractors and persons directly or indirectly employed by such Party for services in connection with the Authorized Work Each Party shall require its Contractors to be bound by terms and conditions which are the same or similar to those contained in this Agreement as the same may be applicable to Contractors 28 RELATIONSHIP OF THE PARTIES The Parties shall act in an independent capacity and not as officers or employees or agents of each other This Agreement is not intended to and does not form any partnership within the meaning of the California Uniform Partnership Act of 1994 or otherwise 29 NONDISCRIMINATION CLAUSE No Party shall unlawfully discriminate harass or allow harassment against any employee or applicant for employment because of sex race color ancestry religious creed national origin physical disability (including HIV and AIDS) mental disability medical condition (cancer) age(over 40) marital status and denial of family care leave Each Parry shall ensure that the evaluation and treatment of its employees and applicants for employment are free from such discrimination and harassment and shall comply with the provisions of the Fair Employment and Housing Act (Government Code Section 12990 (a) (f) et seq) and the applicable regulations promulgated thereunder (California Code of Regulations Title 2 Section 7285 et seq) The applicable regulations of the Fair Employment and Housing Commission implementing Government Code Section 12990 (a) (f) set forth in Chapter 5 of Division 4 of Title 2 of the California Code of Regulations are incorporated into this Agreement by reference and made a part hereof as if set forth in full Each Party represents and warrants that it shall include the substance of the nondiscrimination and compliance provisions of this clause in all subcontracts for its Authorized Work obligations 30 COMMISSION/UTILITY AUTHORITY TO MODIFY OR TERMINATE This Agreement and the Program shall at all times be subject to the discretion of the Commission including but not limited to review and modifications excusing a Party s performance hereunder or termination as the Commission may direct from time to time in the reasonable exercise of its jurisdiction In addition in the event that any ruling decision or other action by the Commission adversely impacts the Program SCG shall have the right to terminate this Agreement in accordance with the provisions of 2010 12 Orange County Cities Partnership Program Agreement 18 Section 25 above by providing at least ten (10) days prior written notice to the Cities setting forth the effective date of such termination Notwithstanding the right to terminate the Parties agree to share in the responsibility and to abide by Commission energy policy supporting this Program The Parties agree to use all reasonable efforts to minimize the adverse impact to a Party resulting from such Commission actions including but not limited to modification of the required energy savings goals set forth in Section 4 2 which are fundamental to this Agreement 31 NON WAIVER None of the provisions of this Agreement shall be considered waived by either Party unless such waiver is specifically stated in writing 32 ASSIGNMENT No Party shall assign this Agreement or any part or interest thereof without the prior written consent of the other Party and any assignment without such consent shall be void and of no effect Notwithstanding the foregoing if SCG is requested or required by the Commission to assign its rights and/or delegate its duties hereunder in whole or in part such assignment or delegation shall not require the Cities consent and SCG shall be released from all obligations hereunder arising after the effective date of such assignment both as principal and as surety 33 FORCE MAJEURE Failure of a Party to perform its obligations under this Agreement by reason of any of the following shall not constitute an event of default or breach of this Agreement strikes picket lines boycott efforts earthquakes fires floods war(whether or not declared) revolution riots insurrections acts of God acts of government(including without limitation any agency or department of the United States of America) acts of terrorism acts of the public enemy scarcity or rationing of gasoline or other fuel or vital products inability to obtain materials or labor or other causes which are beyond the reasonable control of such Party 34 SEVER-ABILITY In the event that any of the terms covenants or conditions of this Agreement or the application of any such term covenant or condition shall be held invalid as to any person or circumstance by any court regulatory agency or other regulatory body having jurisdiction all other terms covenants or conditions of this Agreement and their application shall not be affected thereby but shall remain in full force and effect unless a court regulatory agency or other regulatory body holds that the provisions are not separable from all other provisions of this Agreement 35 GOVERNING LAW VENUE This Agreement shall be interpreted governed and construed under the laws of the State of California as if executed and to be performed wholly within the State of California Any action brought to enforce or interpret this Agreement shall be filed in Los Angeles County California 2010-12 Orange County Cities Partnership Program Agreement 19 36 SECTION HEADINGS Section headings appearing in this Agreement are for convenience only and shall not be construed as interpretations of text 37 SURVIVAL Notwithstanding completion or termination of this Agreement the Parties shall continue to be bound by the provisions of this Agreement which by their nature survive such completion or termination Such provisions shall include but are not limited to Sections 9 10 13 14 15 18 22 35 37 and 38 of this Agreement 38 ATTORNEYS FEES Except as otherwise provided herein in the event of any legal action or other proceeding between the Parties arising out of this Agreement or the transactions contemplated herein each Party in such legal action or proceeding shall bear its own costs and expenses incurred therein including reasonable attorneys fees 39 COOPERATION Each Party agrees to cooperate with the other Party in whatever manner is reasonably required to facilitate the successful completion of this Agreement 40 ENTIRE AGREEMENT This Agreement (including all of the Exhibits and Attachments hereto which are incorporated into this Agreement by this reference) contains the entire agreement and understanding between the Parties and merges and supersedes all prior agreements representations and discussions pertaining to the subject matter of this Agreement 41 COUNTERPARTS This Agreement may be executed in one or more counterparts each of which shall be deemed to be an original but all of which together shall be deemed to be one and the same instrument [INTENTIONALLY LEFT BLANK] 2010 12 Orange County Cities Partnership Program Agreement 20 SIGNATURE PAGE IN WITNESS WHEREOF the Parties hereto have caused this Agreement to be executed by their duly authorized representatives The Cities CITY OF COSTA MESA Name Allan Mansor Name Allan R eder Title Mayor Title City Manager Date �/- Z Date CITY OF FOUNTAIN VALLEY Fbuntain Valley Cdy Attorney Approval l Name rry R Cr3ndall CT ame Raymond H Kromer Title ayor 1t1 City Manager Date a APPROVED AS TO FORIA JENNIFER McCRATH City Attorney CITY OF HUNTING-',ON BEACH &-P C Attorney N�t - 5 Name Calo' r Grey n Na e fr/-d Wilson Title M o mgton Beach Tie C ty Administrator Date / -A0/0 Date 2010 12 Orange County Cities Partnership Program Agreement 21 CITY OF WESTMINSTER APPROVED AS TO FORM DATE BY O1TY ATTORNEY Name Donald amm Title City Manager Date SCG SOUTHERN CALIFORNIA GAS COMPANY -,�a J- Z� By Mark Games Title Director Customer Programs Date 2010 12 Orange County Cities Partnership Program Agreement 22 EXHIBIT A PROGRAM IMPLEMENTATION PLAN 1) Program Name and Program ID number Program Name Orange County Cities Partnership Program ID Number TBD 2) Projected Program Budget Table Table 11 Integration Total Budget Total Total Marketcng Allocated Budget � y Administrative & , ple TA intei�tat Direct to Other B Main Program Cost(Actual) Outreach Programs Program Program Name/Sub 4 (Actual) (if (Actual) # Pro rams y Applicable) Market Sector Programs 1 �1 � �,�lj@ 1� -� ,�a 1 11 i I 1 I - ��6�Wr is� Core Program Sub Program #1 Sub Program #2 Etc TOTAL These budget numbers are presented in Appendix C Energy Division Tables Graphs Pie Charts Table 7 1 2009 2011 IOU Strategic Planning Program Budget 3) Projected Program Gross Impacts Table Table 2 Progra I Program Name/Sub 2009-2011 2009-2411 2O -2011 i Definition of Table 1 Column Headings Total Budget is the sum of all other columns presented here Total Administrative Cost includes all Managerial and Clerical Labor Human Resource Support and Development Travel and Conference Fees and General and Administrative Overhead(labor and materials) Total Direct Implementation—includes all financial incentives used to promote participation in a program and the cost of all direct labor installation and service labor hardware and materials and rebate processing and inspection used to promote participation in a program Total Marketing&Outreach includes all media buy costs and labor associated with marketing production Integrated Budget Allocated to Other Programs includes budget utilized to coordinate with other EE DR or DG programs Total Budget is the sum of all other columns presented here Definition of Sub Program A sub program of a program has a specific title targets budget uses a unique delivery or marketing approach not used across the entire program and for resource programs has specific estimated savings and demand impacts 2010 12 Orange County Cities Partnership Program Agreement 23 in# Programs Three-Year EE Three-Ye r EE 't e-Year E Progr PrgramTGross ' tkPros kWh �Savm s kW Savings Therm Savorks Market Sector Programs r r Core Program#1 Sub Program#1 f6 , J", Sub-Program#2 Etc 4 6 °, � TOTAL, I I � These budget numbers are presented in Appendix C Energy Division Tables Graphs Pie Charts Table 7 1 2009 2011 IOU Strategic Planning Program Budget 4) Program Element Description and Implementation Plan a) List of program elements Program elements are described below b) Overview Core Program Element A-Government Facilities A 1 Retrofit of county and municipal facilities The four cities in the Orange County Partnership are developing detailed lists of facilities that will be retrofitted during the three year program Many of these facilities and their respective energy savings have been identified and quantified Other buildings have been audited by the CEC and the Partnership is awaiting the CEC s reports Municipal facilities energy efficiency is a big component of Huntington Beach s local government partnership It will consist of numerous projects to 2 phases Phase 1 consists of Monitoring Based Commissioning of the 2 largest municipal facilities in the City and IT energy saving retrofits such as server virtualization network energy management software and HVAC retrofits of server rooms Phase 2 energy projects will consist of lighting system redesign&retrofits HVAC retrofits Pumping retrofits boiler retrofits domestic hot water and building envelope improvements A 2 Retro commissioning(of buildings and clusters of buildings) The cities are including this means of achieving significant energy savings in their plans See A 1 above A 3 Integrating Demand Response into the audits SCG will help promote participation in demand response programs Each city plans to increase its participation in demand response accordingly Integrated EE/DR audits will be conducted in eligible facilities A 4 Technical Assistance for project management,training,audits,etc Each partnership has a specific budget for each of these activities A 5) On Bill Financing 2010 12 Orange County Cities Partnership Program Agreement 24 Each city in the partnership has indicated a keen interest in using On bill financing(OBF) The extent of participation in OBF will be limited only by the according to OBF guidelines approved by the CPUC Core Program Element B Strategic Plan Support B 1 Code Compliance Support The Partnership will support the individual cities as they examine ways to increase compliance with existing codes Each partner is aware that this is an area where increased enforcement can result in substantial energy savings and greenhouse gas emissions The partnership will provide training technical assistance and additional support from SCE s and SCG s Codes and Stamdards program to help build capacity in local government to address code compliance issues B 2) Reach Code The cities in this Partnership are also interested in establishing meaningful reach codes as part of its effort secure long term energy savings and greenhouse gas emissions in support of the CLTEESP The Partners will consider what other cities have done and will benefit from process templates and other best practices See Table 6 for more details B 3) Guiding Document(s)Support At least one of the cities offers information at the city s building permit office on best practices and energy efficiency opportunities through the utility s programs Significant enhancements to this practice are planned for the 2009—2011 program cycle The Partnership intends to make available training documents and templates to help cities develop their climate and energy action plans especially as it relates to utility energy elements B 5) Financing for the community The Partners are aware of the opportunities for financing provided by AB 811 and will be examining its possibilities The Partnership will provide AB811 presentation and technical assistance through the Peer to peer support network B 5) Peer to Peer Support IOUs intend to develop an effective means by which each city participating in partnerships past and present can readily share information with others Conference calls including all Partnerships as well as conferences will be conducted on a routine basis Core Program Element C Core Program Coordination C 1) Outreach and Education The partnership has a portion of its budget specifically allocated to outreach and education to demonstrate local government leadership and to provide the community with opportunities to provide energy actions and reduce the community s environmental footprint ME&O activities will consist of staff training Huntington Beach Green Corp citizen& Environmental Board training SCE s Mobile Education Unit at the Annual Green Expo Stipends for HB Green Corp home and business energy& green audits&onsrte retrofits Support for Huntington Beach s annual environmental awards publishing of Huntington Beach s case studies and strategic sustainability and energy plans and potentially implementing an AB 811 financing mechanism for citizens of Huntington Beach C 2) Residential and Small Business Direct Install 2010 12 Orange County Cities Partnership Program Agreement 25 There are no activities planned for direct install in homes and business at this time However outreach will be done in the communication to create awareness of energy services and programs as mentioned in C 1 C 3)Third party program coordination The Partnership will execute community events appropriate for a third party contractor to execute such as light exchange events C 4) Retrofits for just above LIEE qualified customers Only coordination activities contemplated C 5 Technical Assistance for program management,training,audits,etc a specific portion of the partnership budget is allocated specifically for this activity See Table 6 for more details c) Non Incentive Services e Tram Huntington Beach Green Corps of citizen volunteers to provide energy efficiency audits for residential small commercial and low income citizens of Huntington Beach provide stipends to offset background checks and expenses m Study &consider voluntary reach green codes similar to the HB Goes Green Residential Scorecard that is currently in a pilot project mode ® Support for the annual Environmental Award o Publishing case studies and sustamability and energy/climate plans with support from available programs and funding sources ® Strategic plan support The city of Costa Mesa would like to extend its existing green building permit waiver program d) Target audience ® All Municipal Facilities City Halls Civic Center Police Departments Libraries Social Services Community Centers Sports Fields Medical Facilities Parks and water infrastructure • Additionally citizens and businesses and city staff are the target audience for partner cities e) Implementation The program will be cost effectively implemented with customized incentives for the retro commissioning and retrofitting of partner cities municipal facilities based on SCG enhanced incentives for LGPs 5) Program Element Rationale and Expected Outcome a) Quantitative Baseline and Market Transformation Information Table 3 Baseline Metric Metric A Metric B Metric C Program/Element Refer to the overarching PIP section b) Market Transformation Information 2010 12 Orange County Cities Partnership Program Agreement 26 Table 4 Market Transformation Planninu Estimates Program/Element 2009 2010 2011 Metric A Metric B Metric C Etc Refer to the overarching PIP section c) Program Design to Overcome Barriers In this Partnership the barriers and strategies to overcome them are the traditional resource barriers of expertise and funding as outlined in the Master PIP d) Quantitative Program Objectives Table 5 Program Program Program Target by Target by Target by Target Program Element 2009 2010 2011 1 Natural Gas Savings Gross Therm 40 000 80 000 120 000 2 Number of Workshops TBD TBD TBD 3 Number of Ordinances Codes etc TBD TBD TBD 4 #of ME&O Events conducted that target TBD TBD TBD Residential customers 6) Other Program Element Attributes a) Best Practices Same as outlined in the Master PIP b) Innovation Demonstrate environmental stewardship and community leadership in support of the CLTEESP by developing a municipal sustainabihty dashboard to simplify sustainability reporting including energy efficiency and renewable energy c) Interagency Coordination Huntington Beach is a PIER program partner and is planning on installing Bi level area lights and Enforma diagnostic software Huntington Beach has a materials recovery facility in its jurisdiction and will be partnering to develop a RESCO grant proposal for the CEC utilizing indigenous renewable energy resources in Huntington Beach The partnership will provide technical assistance and other support though the Codes and Standards program and its relationship with PIER as well as facilitate support from other programs and organizations through its network of consultants engaged for this purpose d) Integrated/coordinated Demand Side Management 2010-12 Orange County Cities Partnership Program Agreement 27 Orange County cities will pursue necessary&cost effective DSM as identified in the SCE s Energy Leader Master PIP and have identified at least 5 accounts that are eligible for participation in Dermand Response programs The partnerships will facilitate the provision of technical support for renewable energy related activities being planned by the City of Huntington Beach and other cities wishing to pursue similar opportunities Hungtington Beach will apply for a RESCO grant from the CEC and Federal government to utilize indigenous renewable energies e) Integration across resource types(energy water air quality etc) Part of the Phase 2 energy projects identified earlier will include smart irrigation controllers for the irrigation accounts that use significant amounts of water f) Pilots PIER program Bi level LED area lighting and Enforma diagnostic software in the City of Huntington Beach is currently • New city buildings Chamber of Commerce and Police Building will be LEED Certified in Costa Mesa g) EM&V The utilities are proposing to work with the Energy Division to develop and submit a comprehensive EM&V Plan for 2009 2011 after the program implementation plans are filed This will include process evaluations and other program specific studies within the context of broader utility and Energy Division studies More detailed plans for process evaluation and other program specific evaluation efforts cannot be developed until after the final program design is approved by the CPUC and in many cases after program implementation has begun since plans need to be based on identified program design and implementation issues 7) Partnership Program Advancement of Strategic Plan Goals and Objectives Table 6 1 1 Develop adopt and implement model building energy codes(and/or other green codes)more stringent than Title 24 s requirements on both a mandatory and voluntary basis adopt one or two additional tiers of increasing stringency 1 2 Establish expedited permitting and Costa Mesa will consider expedited permitting entitlement approval processes fee structures based upon reduced valuation in 2009 and other incentives for green buildings and other above code developments 1 3 Develop adopt and implement model point of sale and other point of transactions relying on building ratings 1 4 Create assessment districts or other Huntington Beach will investigate the adoption mechanisms so property owners can fund EE of an AB 811 financing mechanism for its through city bonds and pay off on property jurisdiction taxes develop other EE financing tools 1 5 Develop broad education program and peer to peer support to local govt s to adopt and implement model reach codes 2010-12 Orange County Cities Partnership Program Agreement 28 1-6 Link emission reductions from reach codes and programs to ARB s AB 32 program 2 2 Dramatically improve compliance with and enforcement of Title 24 building code and of HVAC permitting and inspection requirements(including focus on peak load reductions in inland areas) 2 3 Local inspectors and contractors hired by Huntington Beach already has two energy local governments shall meet the requirements service companies pre qualified and they are of the energy component of their professional energy literate and conscious firms licensing(as such energy components are Additionally Costa Mesa has a service adopted) agreement with a certified energy company that is also energy literate 3-1 Adopt specific goals for efficiency of Huntington Beach will be publishing an local government buildings including environmentally preferred purchasing policy and publishing energy/climate plans as part of the 2009 2011 Partnership with SCE Additionally Costa Mesa is also interested in publishing an energy action plan in partnership 3-2 Require commissioning for new buildings Phase 1 energy projects are retro and re commissioning and retro commissioning the two largest municipal commissioning of existing buildings facilities with significant near term energy savings The City of Costa Mesa has a high interest in retro commissioning all its current municipal facilities to maximize both energy savings and performance 3 4 Explore creation of line item in LG Huntington Beach has devoted a portion of its budgets or other options that allow EE cost annual capital improvement plan to energy savings to be returned to the department and/or efficiency and the savings accrue to the general projects that provided the savings to fund additional efficiency fund However part of the energy/climate action plan will track the fiscal impacts (savings)created by the plan 3 5 Develop innovation Incubator that competitively selects initiatives for inclusion in LG pilot projects 4 1 LGs commit to clean energy/climate Both the City of Costa Mesa and Huntington change leadership Beach have located appropriate saes for large scale solar installations and both cities are exploring current funding mechanisms Huntington Beach is also applying for grants to study ocean&urban wind power and will meet 2020 AB 32 goals before 2015 HB has signed the US Mayors Climate Protection Agreement http Hwww usma ors org/climateprotection/ 4 2 Use local governments general plan Huntington Beach has deferred investment in energy and other elements to promote energy general plan updates to include energy/climate efficiency sustainability and climate change concerns 4 4 Develop local projects that integrate Phase 2 energy projects will include water EE/DSM/water/wastewater end use efficiency projects including aerators and ET irrigation controllers Additionally as wastewater stormwater and potable water 2010 12 Orange County Cities Partnership Program Agreement 29 capital projects are pursued this partnership with SCE and SCG will ensure that they are as energy efficient as possible 4-5 Develop EE related carrots and Huntington Beach is studying zoning and sticks using local zoning and development development authority changes to comply with authority AB32/SB375 Specifically we are updating the Beach/Edinger Corridor plans and the Downtown Specific plan to create accessible and walkable neighborhoods that enhance Huntington Beach 2010 12 Orange County Cities Partnership Program Agreement 30 EXHIBIT B 2010-12 ORANGE COUNTY CITIES PARTNERSHIP PROGRAM GOALS AND BUDGET 2010 2012 Energy Savm s Gross Therm 2010 2011 2012 3 year Total SCG 40 000 Therm 40 000 Therm 40 000 Therm 120 000 Therm Other non resource goals are contained in the SCG PIP in Exhibit A 2010 12 Orange County Cities Partnership Budget Orange County Cities Partnership Total Non Incentive Budget $402 465 SCG Incentive From SCG Core Programs $120 000 SCG Authorized Budget SCG Administrative Other $105 083 SCG Administrative Overhead $44 927 Total Utility Authorized Budget $150 010 Orange County Cities Authorized Budget $252 455 2010 12 Total Non-incentive Program Budget $402 465 Projected Allocations for Orange CountyCities Authorized Budget $252,455 2010 2011 2012 Administration Strategic Plan Support $12 000 $12 000 $12 000 Marketing&Outreach $12 150 $12 155 $12 150 Direct Implementation $60 000 $60 000 $60 000 Incentive(1) 40 000 $40 000 $40 000 (1) Incentive is a part of SCG Core Program s Incentive Budget The incentive level is $1 00 per therm for calculated measures Incentives for deemed measures are in accordance with the incentive levels for the applicable SCG Core Programs 2010 12 Orange County Cities Partnership Program Agreement 31 EXHIBIT C EM&V PLAN [TO BE ATTACHED WHEN ISSUED BY THE COMMISSION] 2010 12 Orange County Cities Partnership Program Agreement 32 R 06-04-010 DGX/ays ENERGY EFFICIENCY POLICY MANUAL, VERSION 4.0 (July 2008) Applicable to post-2005 Energy Efficiency Programs R 06-04-010 DGX/ays EE Policy Manual Version 4 0 Table of Contents I Introduction 1 II Policy Objectives and Program Funding Guidelines 2 1 Energy Efficiency as a Procurement Resource 1 a Strategic Plan for PY2009 and Beyond 2 Energy Savings Goals 3 Energy Efficiency Programs 4 Lost Opportunities and Cream Skimming 5 Program Portfolio Management and Strategies 6 Program Portfolio Balance 7 Emissions, Co-Branding 8 Emerging Technologies 9 Program Selection Criteria 10 Public Goods Charge Funding and Gas Surcharge Funding 11 Fund Shifting Rules (see Appendix A Table) 12 Bridge Funding 13 Funds for Long Lead Times 14 Funds, Performance Earnings Basis 15 Mid-Cycle Funding Augmentations (see Rule IV 12) III Common Terms and Definitions (see Appendix B) 7 IV Cost Effectiveness 7 1 Standard Practice Manual (SPM) 2 Total Resource Cost Test (TRC) 3 Program Administrator Cost Test (PAC) 4 Application of the TRC and the PAC,the Dual-Test 5 Avoided Costs and Other Inputs 6 Portfolio Filing of Prospective Cost Effectiveness 7 Fuel Substitution, Solar Water Heating 8 Levelized Unit Cost Estimates 9 Performance Metrics for Non-Resource Programs 10 Fuel Substitution Programs,the Three-Pronged Test 11 Load Impacts for Cost Effectiveness, DEER 12 Mid-Cycle Funding Augmentations V Evaluation, Measurement and Verification (EM&V) 12 1 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 VI Competitive Bidding and Partnership Programs 14 VII Advisory Groups 16 VIII Performance-Based Risk and Reward Incentive Mechanism 17 1 Balancing Accounts 2 Mechanism Structure 3 Earnings or Penalties, Payments 4 Ex Ante Assumptions,1st and 2nd Claims 5 Direction for 1st and 2nd Claims for PY2009-2011 6 Procedures for Review and Approval of Earnings/Penalties 6a Interim Claims 6b Final Claim IX Affiliate and Disclosure Rules 26 X Reporting Requirements 26 XI Process and Procedural Issues 27 APPENDIX A Reference Documents and E-Links 1 Energy Action Plan 1a Energy Action Plan URdate 2 EE Administrative Structure,D 05-01-055 3 Energy Savings Goals, D 04-09-060 4 Standard Practice Manual 5 Database for Energy Efficient Resources (DEER) 6 LT Avoided Cost Methodology and E3 Calculators 7 EE Program Reporting_Requirements Manual 8 EM&V Protocols Tables - Approved Savings Goals (2004-2013) Table - Fund Shifting Rules Graphic - Shareholder Incentive Mechanism Graphic Illustration 11 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 APPENDIX B—GLOSSARY Common EE Terms and Definitions Adopted Program Budget Free Riders(ndership Peer Review Group(PRG) Advanced Technologies Fuel Substitution Performance Basis Affiliate Funding Cycle Performance Earnings Basis(PEB) Avoided Costs Gas Savings Baseline Data Hard To Reach,Non Performance Uncertainties Residential Coincident Peak Demand Hard To Reach,Residential Portfolio Community Choice Portfolio Reporting Aggregators Competitive Solicitation Incremental Measure Cost Pre commercialization Conservation Information and Education Program Programs Conservation Measures Innovation Incubator Program Activities Conservation Programs Institutional Barriers Program Administrator Cost Effectiveness Least Cost/Best Fit Program Administrator Cost Test PAC Cream Skimming Levelized Cost Program Advisory Group PAG) Cross Subsidization Load Management Program Cycle Customer Load Serving Entities Program Implementers Dual Test Lost Opportunities Program Strategy E3 Calculator Market Effect Program Years) Effective Useful Life Marketing and Outreach Ratepayer Electricity Savings Measures Rebate Emerging Technologies Minimum Performance Report Month Standard(MPS) Emissions Reductions Net to Gross Ratio Resource Value Energy Efficiency Groupware Non pnce Factors Service Area Application 2006(EEGA) End Use Operating Program Budget Short Term/Long Term Energy Efficiency_ Participant Test Source BTU Consumption Energy Efficiency Measure Partnership Spillover Energy Efficiency Program Peak Demand Standard Practice Manual Energy Efficiency Savings Peak Demand,Coincident Statewide Evaluation,Measurement and Peak Demand(General) Third Party/Non-IOU Verification(EM&V) Evaluation Project Budget Peak Savings,Coincident Total Resource Cost Test(TRC) kW Financial Incentive Peak Savings—Daily Average (kW) Free Drivers Peak Savings,Non Coincident Zero Net Energy 111 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 ENERGY EFFICIENCY POLICY MANUAL FOR POST-2005 PROGRAMS I Introduction This document presents the California Public Utilities Commission s (Commission) policy rules and related reference documents for the development and evaluation of energy efficiency programs funded by ratepayers in California Referred to as the Energy Efficiency Policy Manual,Version 4 0, this document shall apply to all energy efficiency activities commencing in program year (PY) 2005 and beyond The policy rules, terms and definitions contained herein apply to energy efficiency activities funded through the following mechanisms • The electric public goods charge (PGC), as authorized by Public Utilities (PU) Code Sections 381 and 399 • The gas surcharge, as authorized by PU Code Sections 890-900 • Procurement rates, as authorized by the Commission The rules in this manual do not currently apply to • Low-income energy efficiency programs (LIEE) funded by the electric PGC or gas surcharges • California Alternative Rates for Energy (CARE) for low-income customers funded out of electric or gas PGC1 • Interruptible rate or load management programs2 • Self-generation and demand-responsiveness programs developed in response to AB970 (PU Code Section 39915(b)) 3 1 A separate low-income rulemakmg was initiated on January 25 2007 (R 07-01-042) 2 Interruptible and load management programs are addressed under Decision 05-11-009 (R 02-06-001) 3 These programs were adopted in D 01-03-073,in R 98-07-037 1 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 This document supersedes all previous versions of the Energy Efficiency Policy Manual Sections II-XI below articulate the Commissions policy rules ("Rules") governing energy efficiency activities, commencing in 2006 The term "Program Administrators" refers to the following investor-owned utilities (IOUs) Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), San Diego Gas &Electric Company (SDG&E) and Southern California Gas Company (SoCalGas) II Energy Efficiency Policy Objectives and Program Funding Guidelines 1 Commission and state energy policy, as expressed in the Energy Action Plan and reaffirmed in Decision (D ) 04-12-048, make energy efficiency the utilities' highest priority procurement resource In other words, cost-effective energy efficiency should be first in the "loading order" of resources used by the utilities to meet their customers' energy service needs The Governor's and the state's policies also seek to reduce the environmental impact (including the greenhouse gas emissions) associated with the state s energy consumption, to protect the public's health and safety Energy efficiency is a critical part of the state's strategy to achieve these goals 1 a For PY2009 and through 2020 and beyond, the utilities shall develop a single, comprehensive Strategic Plan updated annually for energy efficiency programs and program cycles The plan shall incorporate collaboration with a wider range of stakeholders, integration with other demand-side management programs, and innovation of energy efficiency programs, as outlined under D 07- 10-032 The utilities shall aggressively pursue energy efficiency as part of the Western Regional Climate Action Initiative, February 26, 2007 and the National Action Plan for Energy Efficiency (See http //www epa gov/solar/energy- programs/napee/index html ) 2 The Commissions overriding goal guiding its energy efficiency efforts is to pursue all cost-effective energy efficiency opportunities over both the short- and long-term By D 04-09-060, the Commission translated this policy into specific annual and cumulative numerical goals for electricity and natural gas savings by utility service territory These goals shall be updated periodically by the Commission as provided for in that decision The Commission-adopted energy savings goals are expressed in terms of annual and cumulative gigawatt hours, million-therms and peak megawatt load reductions By D 06-06-063, Ordering Paragraph 1, the definition of peak megawatt load reduction contained 2 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 in the 2005 Database for Energy Efficient Resources (DEER) shall be used for the purpose of verifying energy efficiency program and portfolio performance4 Program Administrators should develop their energy efficiency program portfolios so that they will meet or exceed these annual and cumulative savings goals, both over the short- and long-term 5 As clarified in D 07-10-032, cumulative savings represent the savings in that year from all previous measure installations (and reflecting any persistence decay that has occurred since the measures were installed) plus the first-year savings of the measures installed in that program year 3 In order to promote the resource procurement policies articulated in the Energy Action Plan and by this Commission, energy efficiency activities funded by ratepayers should focus on programs that serve as alternatives to more costly supply-side resource options (' resource programs") Focusing energy efficiency efforts in this way is the most equitable way to distribute program benefits By keeping energy resource procurement costs as low as possible through the deployment of cost-effective portfolio of resource programs, over time all customers will share in the resource savings from energy efficiency 4 Lost opportunities" are those energy efficiency options which offer long-lived, cost-effective savings and which, if not exploited promptly or simultaneously with other low cost energy efficiency measures or in tandem with other load-reduction technologies or distributed generation technologies being installed at the site (e g, solar heating or photovoltaics), are lost irretrievably or rendered much more costly to achieve "Cream skimming" results in the pursuit of only the lowest cost energy efficiency measures, leaving behind other cost-effective opportunities Cream skimming becomes a problem when lost opportunities are created in the process 5 Program Administrators should manage their portfolio of programs to meet or exceed the short- and long-term savings goals established by the 4 D 06-06-063 As discussed in this decision DEER defines peak demand as the average grid level impact for a measure between 2 p in and 5 p in during the three consecutive weekday periods containing the weekday temperature with the hottest temperature of the year 5 While the energy savings achieved by LIEE programs will count towards the Commission s savings goals,per D 04-09-050 the Commission considers factors other than cost-effectiveness in determining LIEE program design and funding levels 3 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 Commission by pursuing the most cost-effective energy efficiency resource programs first, while minimizing lost opportunities In addition, the Program Administrators should demonstrate in their program planning applications how their proposed portfolio will aggressively increase overall capacity utilization and lower peak loads through the deployment of low load factor/high critical peak saving measures The aggressive annual and cumulative savings goals established by the Commission will serve to discourage cream- skimming program designs or implementation approaches that create lost opportunities Nonetheless, Program Administrators should actively develop strategies to minimize lost opportunities, and should describe those strategies in the applications they submit for each program cycle 6 Compliance with Rule II 5 will generally dictate the appropriate balance for portfolio funding of resource programs across market sectors (e g, residential, industrial, commercial) and geography, as well as the most appropriate program designs Program Administrators should also include a selection of statewide marketing and outreach programs, upstream market transformation programs, information and education programs, support for codes and standards and other activities in their proposed portfolios that support the Commissions short-term and long-term energy savings goals Program administrators shall allocate a sufficient portion of portfolio funding to statewide marketing and outreach to continue and build upon the success of the existing program Statewide marketing and outreach programs should convey a consistent statewide message to energy consumers in all sectors 7 To further support the Governor's and State's goals to reduce greenhouse gas emissions, Program Administrators should explore with their advisory groups ways in which to co-brand with the California Climate Action Registry that will encourage the accurate reporting of emissions in California This might include, for example, marketing and outreach efforts that provide information about the Registry to IOU customers and encourage larger commercial and industrial customers to participate in the Registry reporting protocols In their program plan applications, Program Administrators shall describe the ways in which such co-branding will be supported through their proposed programs Similarly, energy efficiency marketing efforts should strive to co-brand with water conservation messaging, recycling, toxic reductions (particularly mercury from fluorescent lamps), solar, distributed generation, green buildings, low income, and other related programs (D07-10-043, mimeo p 59) 4 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 8 The deployment of new and improved energy efficiency products and applications can help sustain or increase current savings yields from program dollars, and serves to create a new generation of technologies available to tap the cost-effective potential of energy efficiency in ways we cannot predict today In order to provide higher levels of bridging between available upstream innovations and the marketplace, annual funding for emerging technologies programs should increase Program Administrators should work with the California Energy Commission (CEC) and other appropriate stakeholders to include appropriate levels of funding to demonstrate and commercialize emerging technologies funded through the California Public Interest Energy Research (PIER) program and other sources that otherwise would not receive funding for pre-commercialization demonstration In their program planning applications, the Program Administrators shall jointly propose emerging technologies programs and increases to current funding levels for these programs The main purpose of these programs should be to increase the probability that promising technologies will be commercialized within 6 years of program funding and thereby increase the chance of obtaining additional energy savings from these technologies in the long run Program strategies should focus on reducing both the performance uncertainties associated with new products and applications and the institutional barriers to introducing them into the market 9 Per D 05-01-055, Program Administrators with input from the public and advisory groups will develop for Commission consideration their portfolios of energy efficiency programs utilizing selection criteria that are consistent with these Rules Program Administrators will manage a portfolio of programs implemented by IOUs and non-IOUs that are selected and evaluated based on their ability to best meet the policy objectives articulated in these Rules 10 Pursuant to PU Code sections 381, 381 16,399 and 890-900, PGC and gas surcharge funds must be spent to deliver energy efficiency benefits to ratepayers in the service territory from which the funds were collected 6 Consistent with the provisions of AB117 (Chapter 838,Chaptered September 24 2002) Section 3811 was added to Public Utilities Code permitting community choice aggregators (CCAs) to apply to administer cost-effective energy efficiency and conservation programs The Commission adopted certain procedures in Decision (D) 03-07-034 (dated July 10 2003) to implement portions of AB 117 affecting the allocation of energy efficiency program funds [MOVED FROM FOOTNOTE 1] 5 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 Additionally, gas PGC collections must fund natural gas energy efficiency programs and electric PGC collections must fund electric energy efficiency programs However, nothing in these Rules is intended to prohibit or limit the ability of the Commission to direct the IOUs to jointly fund with PGCLgas surcharges, or other collections (e g, via procurement rates) selected measurement studies, statewide marketing and outreach programs, or other energy-efficiency activities that reach across service territory boundaries 11 Fund Shifting Rules (D 05-09-043, Table 8) applicable to the 2006-2008 program cycle are added to these Policy Rules as an attachment to Appendix A Appendix A is modified per D 07-10-032 for carry-back/carry-over funding to apply to the 2009-2011 funding cycle, and is repeated below 12 Bridge Funding Programs continuing from the 2006-2008 program cycle into the 2009-2011 cycle may use 2009-2011 funding, once the 2009-2011 portfolio has been approved and start-up costs for 2009-2011 programs may use 2009-2011 funding once the 2009-2011 portfolio has been approved (D 07-10- 032) Unspent or uncommitted funds from previous program years, or 2006-2008 funds that will not be needed should be used prior to using 2009-2011 funds Both continuing program funding and start-up cost funding are limited to 15% of the current budget cycle without Commission approval An Advice Letter is required for funding in excess of this percentage 13 Funds may be committed for projects with lead times beyond three years under the following conditions • Long-term projects that require funding beyond the three-year program cycle shall be specifically identified in the utility portfolio plans and shall include an estimate of the total costs broken down by year and associated energy savings, • Funds for long-term projects must be actually encumbered in the current program cycle, • Contracts with all types of implementing agencies and businesses must explicitly allow completion of work beyond the end of a program cycle, • Encumbered funds may not exceed 20% of the value of the current program cycle budget to come from the subsequent program cycle, except by approval in an advice letter process, 6 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 • Long-term obligations must be reported and tracked separately and include information regarding funds encumbered and estimated date of project completion, and • Energy savings for projects with long lead times will be calculated by defining the baseline as the applicable codes and standards at the time of the issuance of the building permit 14 For calculating the Performance Earnings Basis (PEB), funds encumbered for continuing programs or for programs with long lead times shall be counted when those funds are spent 15 Mid-Cycle Funding Augmentations See Rule IV 12 below III Common Terms and Definitions 1 Common terms and definitions will facilitate the review, selection and evaluation of energy efficiency activities In particular, program definitions should be designed to facilitate to the extent possible (1) the identification of energy efficiency activities by end-use savings potential, (2) the evaluation, measurement and verification (EM&V) of those activities based on Commission- adopted EM&V protocols, and (3) the coordination of program development and evaluation with resource planning and procurement needs To this end, Program Administrators and program implementers should use the definitions included in Appendix B to these Rules when characterizing any proposed program activity The burden is on them to justify any departure from those terms and definitions IV Cost-Effectiveness 1 The cost-effectiveness indicators referred to in these rules are described in the California Standard Practices Manual Economic Analysis of Demand-Side Management Programs (SPM) Economic Analysis of Demand-Side Management Programs Program Administrators and Implementers should perform cost- 7 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 effectiveness analyses consistent with the indicators and methodologies included in the SPM, unless otherwise indicated 7 2 This Commission relies on the Total Resource Cost Test (TRC) as the primary indicator of energy efficiency program cost effectiveness, consistent with our view that ratepayer-funded energy efficiency should focus on programs that serve as resource alternatives to supply-side options The TRC measures the net resource benefits from the perspective of all ratepayers by combining the net benefits of the program to all ratepayers,both participants and non-participants The benefits are the net present value of avoided costs of the supply-side resources avoided or deferred The TRC costs encompass the net present value of the costs participants incur for the measures/equipment installed over the measure life and all non-rebate$ costs incurred by the program administrator 9 The TRC is calculated utilizing a discount rate that reflects each utility's weighted average cost of capital, as adopted by the Commissionlo 7 See Appendix A of this manual for information on how to obtain a copy of the SPM and its clarifications s The SPM restricts rebates to include only dollar benefits such as rebates or rate incentives (monthly bill credits) paid from the Program Administrator to participating ratepayers 9 The TRC test uses the "incremental" measure cost (not the full cost) and incremental energy savings benefit (not the full energy savings benefit) when an energy-efficient appliance or measure promoted through the program is installed in lieu of the standard (less efficient) appliance/measure that would have been installed, without the utility EE activity The TRC test uses the full measure cost (at the time of installation) and the full energy savings benefit (of the new measure) for the remaining useful life of the pre-existing equipment (e g, 3 or more years), where the utility EE activity causes measure/equipment to be replaced much earlier The TRC test then uses the incremental savings for the balance of the effective useful life of the newly installed measure/equipment and deducts the full cost of that equipment discounted back to the date of the measure/equipment installation io For the 2006-8 program cycle an average IOU weighted cost of capital may have been used for cost effectiveness calculations The value used for ex ante calculations should also be used for ex post calculations 8 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 3 The Program Administrator Cost (PAC) test of cost-effectiveness should also be considered in evaluating program and portfolio cost-effectiveness Under the PAC test, the program benefits are the same as the TRC test,but costs are defined differently to include the net present value of costs incurred by the program administrator (including financial incentives and rebates paid to anyone),but not the costs incurred by the participating customer Like the TRC test, the PAC test is calculated utilizing a discount rate that reflects each utility s weighted cost of capital, as adopted by the Commission 4 Applying both the TRC and PAC cost-effectiveness test is called the "Dual-Test" In almost all instances, an energy efficiency program that passes the TRC test will also pass the PAC test However, if deployment of the program requires rebates or financial incentives to participants that exceed the measure cost, then the program may pass the TRC test, but fail the PAC test Considering the results of both tests when evaluating program proposals ensures that program administrators and implementers do not spend more on financial incentives or rebates to participating customers than is necessary to achieve TRC net benefits 5 TRC and PAC benefits should be computed utilizing the avoided cost methodologies and input assumptions, including non-price factors (e g, for avoiding greenhouse gas and non-greenhouse gas pollutants) that have been developed for the evaluation of energy efficiency programs in our avoided cost rulemaking, R 04-04-02511 The performance earnings basis (PEB) of energy efficiency resource programs shall be calculated from TRC and PAC benefits (being equal) minus TRC and PAC costs weighted two-thirds and one-third respectively (D 05-04-051) 6 A prospective showing of cost-effectiveness using the Dual-Test for the entire portfolio of ratepayer-funded energy efficiency activities and programs (i e , individual programs, plus all costs not assignable to individual programs, such as overhead, planning, evaluation, measurement verification and administrator compensation and performance, if applicable) is a threshold condition for eligibility for ratepayer funds This prospective showing of cost- effectiveness shall include the costs for shareholder incentives that are projected 11 See D 05-04-024 and D 06-06-063 9 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 to be paid for portfolio performance under the energy efficiency risk/reward incentive mechanism in effect at that time 12 This threshold requirement applies to each of the following (1) the entire statewide portfolio of programs and (2) the service-territory wide program portfolios offered by each Program Administrator, excluding emerging technologies programs Program administrators must demonstrate that this threshold requirement is met on a prospective basis in their program funding applications to the Commission If a prospective showing of cost-effectiveness for the entire statewide portfolio including emerging technologies programs does not also pass the Dual-Test, Program Administrators shall describe the benefits associated with these programs that are not reflected in the TRC or PAC tests, and describe how these programs are expected to produce benefits in excess of costs for California ratepayers over the long-term Program Administrators must also demonstrate that the proposed level of electric and natural gas energy efficiency program activities are expected to meet or exceed the Commission-adopted electric and natural gas savings goals, by service territory 13 7 As described in these Rules, fuel-substitution programs must also pass the Dual-Test to be considered for inclusion in the portfolio and eligible for funding In addition, as a condition for the inclusion of solar water heating within the definition of energy efficiency measures, solar water heating installations must be cost-effective on a stand-alone basis, 1 e , pass the Dual-Test of cost-effectiveness to be eligible for funding Similarly, solar-powered water circulators must be cost-effective on a stand-alone basis (i e, pass the Dual-Test) to be eligible for funding 14 Other programs are not strictly required to pass the Dual test on a program level basis to be considered for funding, but their cost- effectiveness must be carefully considered in order to design an overall portfolio that passes the Dual-Test, per Rule IV 6 Accordingly, except where otherwise indicated in these Rules, Program Administrators must present estimates of TRC and PAC net benefits for each program on a prospective basis in their program funding applications, along with any other information that may be requested by the Commission, Assigned Commissioner, Administrative Law Judge or Energy 12 D 07-09-043, Mimeo page 220 13 Per D 04-09-060 savings from LIEE programs will also count towards these goals 14 Per D 07-11-004, eligible for 2006-2008 funding and cumulative savings goals 10 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 Division 15 However, evaluation, measurement and verification costs should not be allocated to individual programs in the calculation of TRC and PAC net benefits Rather, all costs associated with evaluation, measurement and verification should be allocated at the total portfolio level, rather than program by program 8 To support comparisons of all resources in the utilities' procurement portfolio,the program administrators are required to also provide levelized unit cost estimates at the portfolio, end-use and measure level consistent with the methods described in the SPM This information should be submitted with the program administrators' compliance filings on the competitive bid results, during each program cycle 9 The usefulness of the TRC test as a primary indicator of cost- effectiveness is limited for certain programs which do not necessarily focus on the timing or type of resource needs of the utility, such as programs designed to demonstrate or commercialize promising emerging energy efficiency technologies or structurally change the marketplace For statewide marketing and outreach programs and information-only programs, the link between programs and savings is also difficult to discern Therefore, the Commission and program administrators will need to consider factors and performance metrics other than the TRC and PAC Tests of cost-effectiveness when evaluating such program proposals for funding and when evaluating their results 10 Fuel substitution programs may offer resource value and environmental benefits Fuel-substitution programs should reduce the need for supply without degrading environmental quality Fuel-substitution programs, whether applied to retrofit or new construction applications, must pass the following three-prong test to be considered further for funding 1 The program must not increase source-BTU consumption Proponents of fuel substitution programs should calculate the source-BTU impacts using the current CEC-established heat rate 2 The program must have TRC and PAC benefit-cost ratio of 10 or greater The TRC and PAC tests used for this purpose 15 See for example Ordering Paragraph 4 D 04-09-060 11 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 should be developed in a manner consistent with these Rules 3 The program must not adversely impact the environment To quantify this impact, respondents should compare the environmental costs with and without the program using the most recently adopted values for residual emissions in the avoided cost rulemaking, R 04-04-025 The burden of proof lies with the sponsoring party to show that the material environmental impacts have been adequately considered in the analysis For purposes of applying these tests, fuel substitution proponents must compare the technologies offered by their program with the most efficient same- fuel substitute technologies available to prospective participants that would have TRC and PAC benefit-cost ratio of 10 or greater The burden of proof falls on the party sponsoring the analysis to show that the baseline comparison adheres to this requirement Fuel substitution programs with a predominantly load building or load retention character are not eligible for funding, and the proponent of a fuel-substitution program carries the burden of proof to demonstrate that the program focuses on energy efficiency and creates net resource value 11 To the extent possible, the assumptions that are used to estimate load impacts (e g, kWh, kW and therm savings per unit, program net-to-gross ratios, incremental measure costs and useful lives) in the calculation of the TRC and PAC tests shall be taken from the most up-to-date version of the Database for Energy Efficiency Resources (DEER) 16 If the required cost-effectiveness test inputs for a measure to be included into a portfolio are not available in DEER, documentation supporting the inclusion of new information from alternate sources must be provided to Energy Division for review and approval prior to the inclusion of that measure's use in a savings claim or to a portfolio filing's approval Cost-effectiveness parameters for non-DEER measures should be developed using methods and data from DEER to the extent possible The evaluation, measurement and verification protocols for post-2005 programs will include a schedule and process for updating DEER on a regular basis (See Rule V 2 below) (D 08-01-042) 16 See Appendix A of this manual for information on how to access DEER 12 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 12 Costs and energy savings from mid-budget cycle funding additions for programs other than low income energy efficiency (LIEE) programs shall be counted when calculating portfolio cost-effectiveness and the performance earnings basis in applying the energy efficiency risk/return incentive mechanism Energy savings from mid-budget cycle funding additions shall count towards the utilities' energy efficiency goals for resource planning purposes only Such savings shall not be counted towards the energy efficiency goals for the purpose of 1) satisfying the minimum performance standard (MPS) associated with the energy efficiency risk/reward incentive mechanism, or 2) determining which"performance band" (e g, deadband or applicable earnings tier level) should be used in calculating incentive payments or penalties Each proposal to augment energy efficiency program funding must be carefully reviewed to ensure that such funding is not misclassified as LIEE, given the implications associated with LIEE classification that carry over to the adopted incentive mechanism Savings associated with any mid-cycle funding augmentation to the LIEE program will not count towards the MPS (OP 7, D 07- 10-032) V Evaluation, Measurement and Verification (EM&V) 1 The development of energy efficiency programs that deliver reliable energy savings for California s ratepayers depends on well-designed methods of portfolio performance evaluation, measurement and verification (EM&V) Rigorous and strategically focused EM&V practices are required to gauge the performance of Program Administrators and Implementers, verify energy savings, improve the design and success of future energy efficiency programs and enhance the reliability of forecasted savings for resource planning purposes 2 The performance basis and related EM&&V protocols for energy efficiency portfolios and programs for post-2005 energy efficiency activities were developed in the EM&&V phase of Rulemaking 01-08-028, and updated in Rulemaking 06-10-040, consistent with these Rules The California Energy Efficiency Evaluation Protocols were initially adopted by ALJ Ruling dated April 25, 2006 (later updated in June 2006) to specify the current minimum acceptable approaches and procedures for the evaluation of utilities energy efficiency portfolios Per D 05-01-055, Energy Division will have the lead role in the further development of EM&V protocols and procedures and the assigned ALJ may provide additional clarification and direction on EM&V administrative issues as needed 13 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 3 In D 05-04-051 the Commission defined the current performance earnings basis, or PEB, as the net dollar benefits to ratepayers of the utilities portfolios calculated as specified in IV 5 above In D 07-09-043 the Commission defined the Minimum Performance Standard threshold, or MPS, for evaluation of the utility portfolios Together the MPS and PEB form the "performance basis" focus for energy efficiency portfolio performance evaluation Additionally, portfolio evaluation efforts are to be structured such that they can 1) inform the program selection process, 2) provide early feedback to program implementers, 3) produce calculations of performance basis at the end of the funding period, and 4) feed back into the planning process for the next program cycle 4 D 05-01-055 adopts an approach to EM&V administration whereby Energy Division has management and contracting responsibilities for all EM&V impact-related studies that will be used to 1) measure and verify energy and peak load savings, 2) generate data for savings estimates, cost-effectiveness inputs, and the Commission s adopted performance basis, and 3) evaluate whether portfolio goals are met 5 As also directed in D 05-01-055,public participation in the development of impact-related evaluation studies will be provided in several stages including 1) development of the EM&V protocols, 2) the overall EM&V plans, budget and the allocation of funding levels to studies will be addressed during each program planning cycle, 3) study results will be made available for public review and comment while in draft form, and 4) finalized studies will be made available for public review in an appropriate forum established by Assigned Commissioner's ruling 6 D 05-01-055 adopts an approach to EM&V administration whereby Program Administrators and program implementers may directly contract for (and serve as technical lead in managing) program design evaluation and market assessment studies to assist them in selecting and managing a portfolio of programs to meet the Commissions objectives as well as provide them with access to information on a real-time basis to improve program delivery While soliciting input from Energy Division, the Program Administrators should also take the lead in allocating Commission-authorized funding for this category of EM&V across individual studies, develop the scope of work for each study and prepare the RFPs In their program plan applications, the Program Administrators should also describe each type of study (including general scope of work) they or their program implementers plan to manage and/or directly contract for in this category All interested parties should have an opportunity to consider whether any of those proposed studies would create a conflict of 14 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 interest if the IOU Program Administrators or program implementers managed and directly contracted for them VI Competitive Bidding and Partnership Programs 1 Competitive solicitations can help to identify innovative approaches or technologies for meeting savings goals with improved performance that might not otherwise be identified during the program planning process However, not all program activities lend themselves to a competitive solicitation It would be counterproductive to require open bids in instances where, for example, partnerships between IOUs and local governments ("local government partnership programs") can take advantage of the unique strengths that both partners bring to the table, or a combination of partnerships and bilateral contracting arrangements with private or public entities can deliver effective statewide initiatives, such as a statewide public awareness campaign or an upstream lighting program 2 Competition in energy efficiency procurement should focus on soliciting good, new program ideas to achieve or exceed the Commission's savings goals, rather than allocating a specific percentage of program funding to particular implementers Decisions on whether non-IOUs should be program implementers responsible for designing and delivering the program (rather than working to implement IOU-designed programs) should be made based on an evaluation of whether the program designs and delivery mechanisms proposed by non-IOUs are superior to those currently being implemented or planned for the future in achieving overall portfolio savings goals 3 As directed in D 05-01-055, for each program planning cycle, the Program Administrators shall propose a portfolio of programs (with input from the Program Advisory Groups as described in that decision) that reflects the continuation of successful IOU and non-IOU implemented programs and new program initiatives designed to meet or exceed the Commissions savings goals with cost-effective energy efficiency As part of that process, the Program Administrators will identify a minimum of 20% of funding for the entire portfolio of programs that will be put out to competitive bid to third-parties for the purpose of soliciting innovative ideas and proposals for improved portfolio performance Per D 07-10-032, successful third-party programs from the 2006- 2008 program cycle retained by the IOUs for successive budget cycles will count 15 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 towards the 20% and the extensions should be able to be structured as bilateral contracts (D 07-10-032, OP 19) The portions to put out to bid could encompass programs currently designed and delivered by a combination of IOU and non- IOU program implementers Any current program or group of programs (IOU or non-IOU designed and implemented) that can be improved upon in this way may be subject to open bids to replace, augment or otherwise enhance current efforts However, open bids should not be required in instances where current or potential future partnerships between the Program Administrators and local governments can take advantage of the unique strengths that both partners bring to the table to deliver cost-effective energy efficiency services, or where combination of partnerships and bilateral contracting arrangements with private or public entities can deliver effective statewide initiatives that enhance portfolio performance Such activities should be funded out of the 80% (maximum) core portfolio that is not put out to competitive bid 4 As directed in D 05-01-055, the proposed portfolio of programs, portions to put out to bid and the bid evaluation criteria will be filed by the Program Administrators in their program plan applications for each funding cycle, and subject to Commission approval Upon receiving Commission approval of the applications, the Program Administrators will complete the process of selecting programs and program implementers to design and deliver the programs in the next program cycle During this process, the Program Administrators will develop and issue RFPs using criteria approved by the Commission and select a set of bids For the 2007-2011 program cycle, third- party proposals will be included in the utility's portfolio application and the competitively bid RFP process and the PRG s review to ensure that the criteria are applied properly will occur prior to the utility's submittal of the application, as directed in D 07-10-032 The Peer Review Groups (including Energy Division s independent consultant(s)) will observe the Program Administrators' bid selection process to ensure that the criteria are applied properly Before finalizing their selections, the Program Administrators will discuss the proposed results of their bid review process with the Peer Review Groups (and Energy Divisions independent consultants) After incorporating feedback, the Program Administrators will make public all winning bids and submit compliance filings, as directed in D 05-01-055 5 Future partnership programs need to be developed in a manner that places the Program Administrator and local government (or private) partner on more equal footing, in terms of involvement in program design and planning, information sharing and program implementation We recognize that some program partners may prefer or be best suited to functioning as a subcontractor 16 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 to the Program Administrator and performing a supporting role for the program However, this should not be the only option available for partnership programs Other partnership arrangements, e g, where the local government partner is fully involved in program planning and implementation, may take better advantage of the relative strengths of each partner These arrangements must, in any event, be considered in light of other applicable Commission decisions, including the implementation of community choice aggregation, and should in no way diminish or dilute the responsibility and accountability of Program Administrators to meet the Commission-adopted savings goals 6 Standard contract language should improve the effectiveness of future partnership programs The standard language should establish the rights and responsibilities of the partners with sufficient flexibility to enable each partner to make improvements to program performance, as circumstances warrant The standard language should also address information sharing, intellectual property ownership, reimbursement turn-around, dispute resolution, and other issues Energy Division and Legal Division should work with the Program Administrators, interested local governments and other parties to develop a standard contract for future partnership programs, and submit that language with the program plans VII Advisory Groups Decision 07-10-032 eliminated the Public Advisory Groups (PAGs) for the purposes of planning for the 2009-11 program cycle and beyond The following rules combine the functional descriptions of the PAGs with the Peer Review Groups (PRGs) for the 2006-2008 program cycle and the 2009-11 program cycle and beyond, and should be applied to the appropriate program cycle 1 The Program Administrators should put together the advisory groups and implement the program design and selection process consistent with D 05- 01-055 and D 07-10-032 and in the spirit of the collaborative approach they discuss in their filings For 2009 and beyond, the Public Advisory Group (PAG) is eliminated while the Peer Review Group (PRG) is retained Per Decision 07-10- 032, the advisory function formerly performed by the PAG will be subsumed in the statewide strategic planning activity These advisory groups should serve to (1) promote transparency in the Program Administrator's decision-making process, (2) provide a forum to obtain valuable technical expertise from stakeholders and non-market participants, (3) encourage collaboration among stakeholders and (4) create an additional venue for public participation The advisory groups will provide advice and feedback to the IOUs and provide 17 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 information to the Commission, but will not have any independent decision- making or contracting authority 2 As discussed in D 05-01-055, members of the PAGs should be drawn from the energy efficiency expertise of both market and non-market participants across the full spectrum of program areas and strategies One purpose of the PAGs is to provide guidance to the IOUs regarding region-specific customer and program needs, and provide a forum for input and collaboration with the local interests and stakeholders served by the programs However, the PAGs must not focus exclusively on region-specific needs The IOUs and their PAGs should also address statewide programs and consistency issues, bringing in national expertise as appropriate to consider these issues For the purpose, the IOUs should form a subgroup of their PAG members who will closely collaborate and coordinate on statewide marketing and outreach, support for building codes and standards, education and training and other activities that secure both short- and long-term energy savings and peak demand reductions by providing a consistent and recognizable program presence throughout the state In addition, the PAGs and IOUs should collaborate on statewide program designs and implementation strategies that increasingly integrate energy efficiency with demand response and distributed generation offerings to end-users For 2009 and beyond, the Public Advisory Group (PAG) is eliminated while the Peer Review Group (PRG) is retained Per Decision 07-10-032, the advisory function formerly performed by the PAG will be subsumed in the statewide strategic planning activity 3 The IOUs and PAGs should ensure that statewide residential and nonresidential offerings take advantage of"best available practices" and avoid customer confusion by being as uniform and consistent as possible While we recognize that differences in climate zones and other parameters may warrant some variations in program offerings to customers, these variations should be the exception and not the rule If the need emerges to focus on a particular market segment, the IOUs and PAGs may also establish a separate working group of industry experts and stakeholders to address that need 4 Energy Division and DRA staff will be ex officio members of each PAG and peer review subgroup described below, and CEC staff is invited to participate as ex officio members as well The IOUs will select additional PAG members,but participation will be voluntary and there will be no formal voting rules or designation of voting or non-voting members Within each PAG, the IOU will also identify and select a subgroup of non-financially interested members with extensive energy efficiency expertise that are willing to serve as 18 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 peer reviewers for the energy efficiency program evaluation and selection process, referred to as "Peer Review Groups' (PRGs ) 5 As described in D 05-01-055 and D 07-10-032, members of each PRG will be expected to (1) oversee the development of criteria and selection of government partnership programs, (2) review the IOUs' submittals to the Commission and assess the IOUs overall portfolio plans, their plans for bidding out pieces of the portfolio per the minimum bidding requirement and (3) review the bid evaluation utilized by the IOUs and their application of that criteria in selecting third-party programs In addition, the three PRGs are expected to meet and assess the statewide portfolio in terms of its ability to meet or exceed short and long-term savings goals in compliance with these Rules 6 The PAG meetings should be open to the public, and the IOUs should establish a clearinghouse website for noticing these meetings and posting documents to be discussed by the PAG at the meetings In addition, the IOUs are expected to conduct public workshops, at least twice a year that are designed to solicit broad public input from non-PAG members concerning program design and implementation For 2009 and beyond, the Public Advisory Group (PAG) is eliminated while the Peer Review Group (PRG) is retained Per Decision 07-10- 032, the advisory function formerly performed by the PAG will be subsumed in the statewide strategic planning activity VIII Performance-Based Risk and Reward Incentive Mechanism 1 In accordance with Public Utilities Code Section 73910, the Commission has established balancing accounts for each utility that remove significant regulatory disincentives for utility investments in energy efficiency and other demand-side management programs With these balancing accounts, a large majority of the utilities' fixed-cost revenue requirements are no longer tied to the forecasted level of commodity electric and natural gas sales 2 Per D 07-09-043 OP 2, as modified by D 08-01-042 OP 2, the risk/reward shareholder incentive mechanism applies to the energy efficiency programs funded for the 2006-2008 program cycle and for subsequent program cycles until further Commission notice The risk/reward shareholder incentive mechanism is structured as follows a) To be eligible for earnings,SDG&E, PG&E and SCE shall meet the following minimum performance standard (MPS) 19 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 for the energy efficiency portfolio as a whole, on an ex ante basis for load impacts, with verified installations and costs (1) Achieve a minimum of 85% of the Commission- adopted savings goals, based on a simple average of the percentage of each individual gigawatt-hour (GWh), megawatt (MW) and, as applicable, million therm (MTherm) goal they achieve, and also (2) Meet a mirumum of 80% of the goal for each individual savings metric b) SoCalGas shall meet the MPS and be eligible for earnings if it achieves a minimum of 80% of the MTherm savings goal on an ex ante basis for load impacts, with verified installations and costs c) Once the utility meets the MPS, earnings shall be calculated as a percentage (sharing rate) of the "performance earnings basis' (PEB) metric defined in Decision (D ) 94-10-059, as follows (1) Portfolio net benefits calculated using the Total Resource Cost test of cost-effectiveness are weighted by two-thirds, and (2) Portfolio net benefits calculated using the Program Administrator Cost test of cost-effectiveness are weighted by one-third d) Program savings and costs shall be counted in determining whether the MPS is met and in calculating the PEB, as follows (1) Savings from low-income energy efficiency (LIFE) programs shall count towards determining whether the utilities have met their MPS, but neither LIEE program costs nor savings shall be included in the calculation of the PEB under the risk/reward shareholder incentive mechanism (2) With the exception of the Emerging Technologies Program and LIEE, all energy efficiency portfolio costs including associated evaluation, measurement and verification (EM&V) shall be included in the calculation of PEB 20 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 (3) Verified savings from Codes and Standards Advocacy Programs17 shall count as described in (a) and (b) below Codes and Standards savings are to be verified (as opposed to ex ante estimates used for planning purposes) (a) Fifty (50) percent of verified savings from pre- 2006 Codes and Standards Advocacy Programs shall count towards the energy savings goals and minimum performance standards for the 2006-2008 (per D 07-09-043) and 2009-2011 (per D 07-10-032) program cycles (b One hundred (100) percent of verified savings from post-2005 Codes and Standards Advocacy Programs shall count towards the energy savings goals, minimum performance standards and performance earnings basis for the 2006- 2008 and 2009-2011 program cycles Codes and Standards Advocacy costs are included as they are incurred in calculating the performance earnings basis and savings are included as they are realized e) If the utility has met the MPS, a first tier sharing rate of 9% shall apply If the utility has met 100% 17 D 05-09-043 and Attachment 10 Note- The 50% verified savings calculation for Codes and Standards Advocacy work applies qj*to savings leading to the adoption of the 2005 standards developed by the CEC At the time, installed savings and committed savings had been counted during the same budget cycle D 05-04-051 had adopted a policy to count only verified savings To avoid double counting of committed savings with verified savings, a methodology was developed and adopted to derive the amount of savings attributable to reducing energy over the future years concerned (post 2005) using a calculation considering economic potential, market potential and naturally-occurring savings associated with the codes adopted The result was 50% 21 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 of the savings goals, a second tier sharing rate of 12% shall apply, up to the earnings cap adopted for each utility (1) If the MPS is met, each individual savings metric must be no less than 5% below the second tier threshold to be considered within that tier based on the three-metric average (2) If the MPS is met utilizing ex ante assumptions for load impacts, with verified installations and costs, but the ex post EM&V results take an individual metric below the 80% threshold or take the overall portfolio results to between 65% and 85% of the Commission-adopted savings goals, the utility shall continue to earn at the first tier sharing rate of 9%, applied to the ex post PEB, and shall not return any interim claims payments If, however, ex post results take a utility below 65% of Commission goals for any individual metric, the utility shall pay back any interim payments, in addition to any applicable penalty f) Penalties shall begin to accrue if portfolio performance for any single savings metric (GWh, MW or MTherm) falls to or below 65% of the savings goal for that metric If this occurs, the larger of the following penalty provisions apply up to the penalty cap adopted for each utility (1) 5C/kWh,45c/therm and $25/kW per unit penalties applied to each unit below the savings goal, or (if larger) (2) Dollar-for-dollar payback of negative net benefits ('cost-effectiveness guarantee"), where negative net benefits are calculated based on the PEB formula adopted in D 04-10-059 g) Total earnings and penalties are capped for the four utilities combined at$450 million over each three-year program cycle, beginning with the 2006-2008 program cycle The $450 million combined cap is allocated to each utility as follows PG&E--$180 million, SCE--$200 million, SDG&E-$50 million and SoCalGas--$20 million 3 Earnings (or penalties) under the risk/reward shareholder incentive 22 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 mechanism shall be paid as follows a) There shall be two "progress payment" interim earnings claims and one final true-up claim for each three-year program cycle They shall be linked to Energy Division's Verification and Performance Basis Reports as described in D 07-09-043 and in its Attachment 6 b) Interim claims shall be evaluated on a "Cumulative-to-Date" basis, which counts the verified achievements from program year(s) in determining whether the MPS is met in each subsequent interim claim c) Thirty-five (35) percent of the earnings calculated for each interim claim shall be ' held back" until the final true-up claim, in order to minimize the risk of overpaying earnings before the ex post true-up of load impacts in the final claim (D 08-01-042) d) The costs of shareholder incentives shall be included in calculations when (1) evaluating the cost-effectiveness of program plans submitted during the program planning cycle (on a projected basis), or (2) conducting a cost- effectiveness review of portfolio performance in hindsight These costs shall not be included in the calculation of PEB See Appendix A for a graphic illustrating this mechanism 4 Per D 08-01-042, for the 2006-2008 program cycle, the following ex ante assumptions of energy savings and demand reductions shall be used in conjunction with verified installations and verified costs to calculate the 1st and 2nd Claims (a) Except as otherwise provided for below, the ex ante measure savings parameters that are contained in the utilities' E3 calculators, as of the 4th quarter 2007 report for the 1st Claim and as of the 4th quarter 2008 report for the 2nd Claim 23 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 (b) For measures contained in the Database for Energy Efficient Resources (DEER), the 2008 and 2009 DEER updates of ex ante measure savings parameters, including net-to-gross ratios and expected useful lives The 2008 DEER update shall apply to the 1st Claim and the 2009 DEER update shall apply to the 2nd Claim (c) For customized measures or customized projects that represent aggregated measures in the E3 calculator, Energy Division shall identify the appropriate installed measure(s) based on its measure verification results and develop the associated ex ante load impact values For this purpose, Energy Division may use the utilities' tracking system information, engineering workpapers, DEER values and methods, or other current measurement and verification results that are available 5 Per D 08-01-042, direction on the ex ante assumptions used to calculate interim claims during the 2009-2011 program cycle shall be provided in the decision authorizing the 2009- 2011 program plans 6 Procedures for Review and Approval of Earnings/Penalties under the Energy Efficiency Risk/Reward Incentive Mechanism18 (D 07-09-043, OP 5, Attachment 7) 6a Interim Claims - Payments under the interim claim(s) represent a "progress payment" towards total expected earnings (1 ) Evaluation contractors use data requested from investor-owned utility (IOU) program tracking databases and reports to develop Contract Group19 level reports that verify unit installations 18 These procedures augment and substitute for Attachment 4 to Administrative Law Judge s Ruling Adopting Protocols for Process and Review of Post-2005 Evaluation, Measurement and Verification Activities, dated January 11, 2006 19 These procedures augment and substitute for Attachment 4 to Administrative Footnote continued on next page 24 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 (2 ) California Public Utility Commission (CPUC) audit team develops financial audit reports that verify portfolio costs for each utility (3 ) Energy Division aggregates evaluation contractor reports and ex ante measure parameters (updated as directed in VIII 4 and VIII 5 above) for each utility to quantify the portfolio resource benefits and uses that quantity in connection with the audit team reports to develop the draft Verification Report, which is posted on a publicly accessible website Energy Division notifies the CPUC Energy Efficiency service lists and lists of other interested stakeholders 20 mamtamed by Energy Division of the availability of the draft Verification Report and the website posting location Energy Division also notifies all of those stakeholders of the conference described in the next Step (4 ) Energy Division holds a conference by telephone or in person At this meeting, all stakeholders have an opportunity to discuss the draft Verification Report with those who prepared it (and supporting consultants) Stakeholders may raise questions about the draft report, receive responses from those who prepared it, and point out any errors they believe are contained in the report The goal is to have a give and take between the stakeholders, report authors, and the supporting technical experts (5 ) Stakeholders have an opportunity to provide written comments to Energy Division identifying any errors in the draft Verification Report Stakeholders will be required to include in the written comments at least a brief description of every point in the draft report which they believe needs correction, even if discussed at the conference Law Judge s Ruling Adopting Protocols for Process and Review of Post-2005 Evaluation, Measurement and Verification Activities, dated January 11, 2006 20 "Stakeholders" refers to those listed on one of the CPUC s Energy Efficiency service list or who have notified Energy Division of their interest 25 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 (6 ) Energy Division makes any necessary changes to the Verification Report stimulated by the oral conference and written comments All written comments, and Energy Division's treatment of them, will be reflected in an appendix to the Final Verification Report, which is posted on a publicly accessible website (7) Final Verification Report is made publicly available (8 ) Within 45 days of issuance of the Final Verification Report, the utility will file an advice letter for Energy Division disposition pursuant to section 7 61 of General Order 96-B, citing the Verification Report The advice letter will address whether based on that report there are any earnings or penalties, and if so at what level, for the interim claim (9 ) Energy Division will approve the advice letter as soon as practicable thereafter so long as it correctly incorporates the results of the Verification Report, if it does not, Energy Division will take other appropriate action under General Order 96-B 6b Final Claim -The final claim and true-up of savings and performance basis estimates will be based on the Final Performance Basis Report (1 )Evaluation contractors complete draft final evaluation reports21 and post them on a publicly accessible website The evaluation contractors will notify the CPUC Energy Efficiency service lists and lists of other interested stakeholders maintained by Energy Division of the availability of the draft final evaluation reports and their website posting location(s) Energy Division will notify all of those stakeholders of the conference described in the next Step 21 Evaluation reports refer to either interim or final reports submitted to Energy Division by program evaluation contractors describing results of evaluations (e g, impact evaluation studies) of the Contract Groups 26 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 (2 ) Evaluation contractors hold a conference, under Energy Division sponsorship, with stakeholders, by telephone or in-person, to discuss draft final evaluation reports (3 ) Stakeholders have an opportunity to provide written comments identifying any errors in the draft final evaluation reports Stakeholders will be required to include in the written comments at least a brief description of every point in the draft report which they believe needs correction, even if discussed at the conference (4 ) Energy Division directs evaluation contractors to make any necessary changes to final evaluation reports stimulated by the comments All written comments, and Energy Division s treatment of them, will be reflected in appendices to the final evaluation reports The final evaluation reports are posted on a publicly accessible websrte (5 ) Within 60 days of public release, program administrators will respond in writing to the final report findings and recommendations indicating what action, if any, will be taken as a result of study findings as they relate to potential changes to the programs Energy Division can choose to extend the 60 day limit if the administrator presents a compelling case that more time is needed and the delay will not cause any problems in the implementation schedule, and may shorten the time on a case-by-case basis if necessary to avoid delays in the schedule (6 ) Energy Division aggregates evaluation contractor reports for each utility to quantify the portfolio resource benefits and uses that quantity in connection with the audit team reports to develop the draft Final Performance Basis Report Energy Division will notify the CPUC Energy Efficiency service lists and lists of other interested stakeholders maintained by Energy Division of the availability of the draft Final Performance Basis Report and the websrte posting location Energy Division also notifies all of those stakeholders of the conference described in the next Step (7 ) Energy Division, with the assistance of relevant contractors holds a conference with stakeholders, by telephone or in-person At this meeting, 27 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 all stakeholders have an opportunity to discuss the draft Final Performance Basis Report with those who prepared it (and supporting consultants) Stakeholders may raise questions about the draft report, receive responses from those who prepared it, and point out any errors they believe are contained in the report The goal is to have a give and take between the stakeholders, report authors, and the supporting technical experts (8 ) Stakeholders have an opportunity to provide written comments identifying any errors in the draft Final Performance Basis Report Stakeholders will be required to include in the written comments at least a brief description of every point in the draft report or which they believe needs correction, even if discussed at the conference (9 ) Energy Division makes any necessary changes to the Final Performance Basis Report stimulated by the oral conference and written comments All written comments, and Energy Division's treatment of them, will be reflected in an appendix to the Final Performance Basis Report (10 ) Final Performance Basis Report is made publicly available by posting on a publicly accessible website and sending it to the Energy Efficiency proceeding service list(s) (11 ) Within 60 days of issuance of the Final Performance Basis Report, the utility will file an advice letter for Energy Division disposition pursuant to section 7 61 of General Order 96b, citing the Final Performance Basis Report The advice letter will address whether based on that report there are any earnings or penalties, and if so at what level, for the final claim (12 ) Energy Division will approve the advice letter as practicable as possible thereafter so long as it correctly incorporates the results of the Final Performance Basis Report, if it does not, Energy Division will take other appropriate action under General Order 96-B 28 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 IX Affiliate and Disclosure Rules 1 To avoid anti-competitive behavior and cross-subsidies between IOUs and their affiliates, all transactions between the IOU administrator and any implementer that is an affiliate of PG&E, SCE, SDG&E or SoCalGas are banned, per D 05-01-055 2 The Program Administrators will not provide preferential treatment to any provider of an energy efficiency service that uses energy efficiency program funds 3 Bidders for EM&V contracts, including program design evaluation and market assessment studies, shall provide full disclosure of any potential conflicts of interest, including all current non-energy efficiency related contracts with Program Adnunistrators and program implementers X Reporting Requirements 1 The Program Administrators shall present information in their program planning applications in compliance with Ordering Paragraph 13 of D 04-12-048, and in compliance with any further direction by this Commission, the Assigned Commissioner or Administrative Law Judge regarding the content or format of these filings Energy Division may develop reporting requirements through workshops or other means to ensure that the types of data and the format of the information presented in the Program Administrator filings and reports is as consistent as possible 2 The Program Administrators shall file reports on portfolio and program activities on a regular basis during the program cycle using the standardized reporting formats, definitions, timelines and narratives established by the Energy Division, as updated from time to time The design and oversight of program-specific, portfolio-level and financial reporting requirements for energy efficiency activities will remain the responsibility of the Energy Division, as discussed in D 05-01-055 Energy Division shall design the reporting requirements in consultation with the Assigned Commissioner and Administrative Law Judge 3 In addition to other reports that may be required, the Program Administrators shall publish a summary of the achievements of the energy efficiency programs on an annual basis This report will be available to the public on the web and will contain at least the following information for the entire portfolio as well as 29 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 each utility's portfolio (1) energy savings (annual, cumulative, and lifecycle kWh and therms), peak demand savings22, levelized costs, cost per kW saved, total cost to billpayers, total savings to billpayers, net benefits to billpayers and environmental benefits (tons of CO2 and other pollutants avoided) Following each program cycle, a summary of the ex post measured achievements from the entire portfolio will also be published 4 The utilities shall incorporate the correction in the E3 calculator to the erroneous demand reduction estimated for lighting currently contained in DEER that is discussed in Section 8 3 of D 05-09-043 (D 05-09-043, OP 11 ) 5 As discussed in D 05-09-043, the utilities are required to use the August 2005 updates to ex ante expected useful life (EUL) assumptions posted to DEER when reporting actual installations during program implementation, and when submitting calculations of savings, portfolio cost-effectiveness and performance basis during the 2006-2008 program cycle Staff shall ensure that inputs to the E3 calculator are appropriately adjusted, so that these calculations will reflect the ex ante EUL values referenced above (D 05-09-043, OP 12) XI Process and Procedural Issues 1 The Commission, the assigned Commissioner, the assigned Administrative Law Judge, or the Energy Division may utilize both formal and informal procedural vehicles as needed to (1) revise the Rules and /or any of its referenced documents, in whole or in part, at any time, upon request by interested parties or on its own initiative, and (2) resolve disputes among or complaints from various market participants, as circumstances warrant In addition, nothing in these Rules preclude the Commission from planning and developing future energy efficiency programs, or delegating that responsibility to the assigned Commissioner, the assigned Administrative Law Judge or to Energy Division in the future 2 The Assigned Administrative Law Judge or Commission staff may hold workshops or other forums, as needed, for interested parties, customers and market actors to provide input and feedback on energy efficiency-related issues 22 By D 06-06-063, the definition of peak megawatt load reduction contained in the 2005 Database for Energy Efficient Resources (DEER) shall be used for the purpose of verifying energy efficiency program and portfolio performance 30 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 3 Any program proposal for energy efficiency funding must describe a dispute resolution process to be used in dealing with complaints from end-use gas or electric consumers participating or attempting to participate in the program In programs where the Program Administrators hold contracts with third parties, those contracts will also be required to include dispute resolution provisions 31 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 Appendices APPENDIX A Reference Documents 1 Energy Action Plan http //www cpuc ca gov/PUBLISHED/REPORT/51604 htm 1 a Energy Action Plan Update,February 2008 http://www cpuc ca gov/NR/rdonlyres/58ADCD6A-7FE64B32-8C70- 7C85CB31EBE7/0/2008 EAP UPDATE PDF 2 CPUC Decision 05-01-055 "Interim Opinion on the Administrative Structure for Energy Efficiency Threshold Issues" http //www cpuc ca gov/PUBLISHED/FINAL DECISION/43628 htm 3 CPUC Decision 04-09-060 "Interim Opinion Energy Savings Goals for Program Year 2006 and Beyond" See attached tables for the savings goals adopted in that decision,by IOU service territory http //www cpuc ca gov/PUBLISHED/FINAL DECISION/40212 htm 4 Standard Practice Manual Economic Analysis of Demand-Side Management Programs October 2001 ftp //ftp cpuc ca gov/puc/energy/electric/energy+efficiency/em+and+v/std+practice+ manual doc • SPM 2001 Correction Memo From D 07-09-043, Attachment 9, page 7 of 7 linked below for the "SPM Correction Memo of October 7, 1988" http://www cpuc ca gov/NWrdonlyres/3D41FF54-9809-4651-8898- 78F93F84999B/0/CorrectionMemoSPM1071988 pdf • SPM 2007 Clarification Memo From D 07-09-043, attached to this reference list http//www cpuc ca gov/NR/rdonlyres/A7C97EB0-48FA-4F05-9F3D- 4934512FEDEA/0/2007SPMClarificationMemo doc • NTG Numerical Examples from D 07-09-043 http//www cpuc ca gov/NF,/rdonlyres/101F0713-7277-43A8-883D- 8EF2712EFA8Ac0/NumericalExamplesNTGAdjtoTRCD0709043 pdf 32 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 Appendices 5 Database for Energy Efficient Resources (DEER) http //eega cpuc ca gov/deer/ 6 Methodology and Forecast of Long Term Avoided Costs for the Evaluation of California Energy Efficiency Programs http //www ethree com/CPUC/E3-Avoided Costs Final pdf • E3 Calculators (Updated to comply with D 07-09-043,10-7-07) http //www ethree com/cpucceetools html 7 CPUC Energy Efficiency Pro gam m Reporting Requirements Manual under the heading "Reporting Rules" ftp //ftp cpuc ca gov/PUC/energy/electric/energy+efficiency/programs/rrm4 pdf 8 CPUC Energy Efficiency Program EM&V Protocols ftp //ftp cpuc ca gov/PUC/energy/electric/energy+efficiency/em+and+v/evaluatorspro tocols_final_adoptedviarulmg06-19-2006 doc 33 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 Appendices Energy Efficiency Programs Approved Savings Goals 2006 through 2013 (D 04-09-060) SCE Energy Savings Cumulative Cumulative Annual Energy Demand Demand Goal Savings Reductions Reductions Year (GWH/Yr) (GWH)"" MW/Yr) (MW)"" 2006 922 25749 207 541 2007 1046 3621 3 219 760 2008 1167 47885 246 1006 2009 1189 59772 249 1255 2010 1176 71534 247 1502 2011 1164 83171 245 1747 2012 1151 94685 241 1988 2013 1139 106076 240 2228 (1)Total Savings = all savings from energy efficiency programs funded by public goods charge and procures funding This total includes savings from EE programs already in the CEC forecast For incremental saving the levels included in the CEC forecast see D 04 09 060 Attachment 9 (2) GWh savings converted to MW by multiplying by 21 average of utility GWh to peak savings for 2004/5 applications This is an estimate of average peak savings not coincident peak= GWH savings in peak peric hours in period PG&E Gas Energy Savings Savings Cumulative Cumulative Annual Cumulative Annual Energy Demand Demand Goal Gas Savings Goal Savings Reductions Reductions Year MMThNr MMTh "" GWH/Yr GWH " (MW/Yr) (MW)-- 2006 126 321 829 23165 180 503 2007 149 470 944 32605 205 708 2008 174 644 1053 43135 228 936 2009 203 848 1067 53808 232 1168 2010 21 1 1059 1015 63963 220 1388 2011 22 1278 1086 74828 236 1624 2012 23 1509 1173 86562 254 1878 2013 251 1760 1277 99332 278 2156 (1)Total Annual Energy Savings = all savings from energy efficiency programs funded by public goods charge and procurement funding This total includes savings from baseline EE program funding of$100 MM/yr accounted for in the CEC sales forecast For incremental savings above the levels included in the CEC forecast see D 04 09 060 Attachment 9 (2) GWh savings converted to MW by multiplying by 217 which is ratio of GWh to peak savings for 2004/5 applications This is an estimate of average peak savings not coincident peak= GWh savings in peak period /560 hours in period 34 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 Appendices Energy Efficiency Programs Approved Savings Goals 2004 through 2013 (D 04-09-060) SoCalGas Gas Savings Cumulative Gas Annual Goal Savings Year (MMTh/Yr) (MMTh)"" 2004 96 96 2005 96 193 2006 147 340 2007 193 533 2008 233 765 2009 272 1037 2010 283 1320 2011 299 1619 2012 323 1942 2013 358 230 1 Total Savings = all savings from energy efficiency programs funded by public goods charges and procurement funding This total includes natural gas savings from energy efficiency programs already included in the CEC forecast SDG&E Gas Energy Savings Savings Cumulative Cumulative Annual Cumulative Annual Energy Demand Demand Goal Gas Savings Goal Savings Reductions Reductions Year (MMTh/Yr) (MMTh)- (GWH/Yr) (GWH)- (MW/Yr) (MW)- 2004 18 18 2684 2684 504 2005 18 36 2684 5368 1007 2006 27 63 2805 8173 546 1553 2007 31 95 2851 11024 542 2095 2008 37 131 2844 13868 54 2635 2009 41 173 2823 16691 536 3171 2010 45 218 2736 19427 52 3691 2011 49 267 2625 22052 499 419 2012 53 320 221 7 24269 421 461 1 2013 57 376 2149 2641 8 408 5019 Total Savings = all savings from EE programs funded by public goods charge and procurement funding This total includes savings from EE programs already in the CEC forecast For incremental savings above the levels included the CEC forecast see D 04 09 060 Attachment 9) MW Savings derived by multiplying GWh Savings by 0 19 average value SDG&E GWh to peak savings for 2004/5 applications This is an estimate of average peak savings during all the peak hours = GWh savings in peak period/560 hours in period 35 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 Appendices Total Electricity and Natural Gas Program Savings Goals (all IOUs) 2006-2013 (D 04-09-060) Total Total Annual Total Annual Total Total Natural Cumulative Electricity Cumulative Peak Gas Natural Gas Savings Savings Savings Savings Savings (GWh/ r) (GWh/yr) (MW) MMTh/ r) (MMTh/ r) 2004 1 838 1 838 379 21 21 2005 1 838 3 677 757 21 42 2006 2032 5 709 1 199 30 72 2007 2 275 7 984 1 677 37 110 2008 2 505 10 489 2205 44 154 2009 2 538 13 027 2 740 52 206 2010 2 465 15 492 3 259 54 260 2011 2 513 18 005 3 789 57 316 2012 2 547 20 552 4 328 61 377 2013 2 631 23 183 4 885 67 444 Total annual energy savings = all savings from EE programs funded by public goods charges and Procurement funding This total includes savings from baseline EE program funding of $100 MM/yr accounted for in the CEC sales forecast For incremental program savings above the levels included in the CEC forecast, see Attachment 9 of D 04-09-060 Average peak MW estimated by multiplying GWh from utility by the ratio they used in 2004/5 filings ranging from 019 to 0 21 This is an estimate of average peak savings, not coincident peak savings = GWh savings in peak period/560 hours in period 36 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 Appendices D 05-09-043 TABLE 8 ADOPTED FUND SHIFTING RULES,as modified by D 06-12-013 and D 07-10-032 Category Shifts Among Budget Categories Within Shifts Among Programs Within Shifts Among Categories Program Cate2ory Resource/ Yes no formal Commission Yes no formal Commission Yes up to 25 A on an annual basis or Nonresource review/approval triggered review/approval triggered 50 A on a cumulative basis Advice Programs However 15 day PRG notification letter required for larger shifts (includes and comment required if shifts Adding a new program outside the multiple program exceed 25°/ on an annual basis or competitive bid process triggers categories—see 50/o on a cumulative basis Advice letter process definitions Adding a new program outside the Advice letter required if allocation to below) competitive bid process triggers third party implementers is expected Advice letter process to fall below 20% Advice letter required if allocation to third party implementers is expected to fall below 20 A C&S/ET/ Yes same as above Advice letter required for shifts that Advice letter required to shift funds Statewide M&O would reduce any of these programs OUT of any program more than 1°/of by more than 1°/of budgeted levels budgeted levels EM&V Yes within utility portion Not Applicable—Single Program Assigned ALJ or Commissioner ruling Fund shifting between the required to shift funds OUT of EM&V utility and ED portions only by any amount with Assigned Commissioner or ALJ approval in consultation with Joint Staff For purpose of these fund shifting rules the Resource/Non Resource program categories are as follows • Resource/Non Resource Program categories for SCE SDG&E and SoCalGas are (1)Residential (2)Nonresidential (3)Crosscutting (except C&S ET SW Marketing and Outreach EM&V) • Resource/Non Resource Program categories for PG&E are (1)Mass Market(residential/small commercial cross cutting) (2)Residential targeted market sectors within Targeted Markets and(3)Non Residential targeted market sectors within Targeted Markets Utility program administrators may carryover/carryback funding during the 2006 2008 program cycle without triggering a review/approval process Authorization for utilizing 2006 funding in 2005 for specific purposes is described in D 05 09 043 Per D 06 12 013 (OP 2) utility program administrators may file an advice letter to seek authorization to shift existing unspent uncommitted energy efficiency funds from previous program cycles to the 2006 2008 portfolio budgets to fund new energy efficiency programs or incremental energy efficiency activities as part of existing authorized programs Utilities should consult with the PRG prior to submitting this type of advice letter Per D 07 10 032 carryover/carryback funding is permitted during the 2006 2008 budget cycle so long as the 2009 2011 portfolio has been approved CPUC approval is not necessary for up to 15°/of the current program cycle See Rules Ii 12 and II 13 Changes to incentive levels or modifications to program design(such as changes to customer eligibility requirements)will not trigger Energy Division or formal Commission review except as indicated below We expect that the results of EM&V studies statewide coordination efforts and ongoing consultation with advisory groups will enable utility program administrators to identify the best practices and program designs for portfolio implementation if the proposed incentive level change impacts as statewide offering e g is included in the deemed and calculated measure list presented in the statewide PAG meeting on August 2 3 2005 and is less than 50 A of the original incentive level on a cumulative basis over the three year program cycle the utility administrator will need to inform and solicit comment from the Joint PRGs prior to the change taking place • If the proposed incentive level change impacts a statewide program offering and is more than 50°/ of the original incentive level on a cumulative basis the utility administrator will follow the advice letter process described in these rules The program administrator will notify the PRG of all incentive level changes that take place For all significant shifts in funding or modifications to program design the utilities should seek informal review with their PRG members as part of the ongoing exchange of information during program implementation Where an advice letter is required under these rules absent a protest or written data request by Energy Division for additional information by the end of the 20 day protest period the request will become effective on the twentieth day after filing If Energy Division staff issues a data request before the end of the protest period the response time requirements and other procedures applicable to our normal advice letter procedures as updated by D 05 01 032 will take effect All advice letters required for fund shifting shall be served on the service list in A 05 06 004 and R 01 08 028 or its successor rulemaking unless otherwise specified by the assigned ALJ The assigned ALJ in consultation with the Assigned Commissioner may provide further clarification on implementing these fundshifting rules or consider modifications to these rules during the 2006 2008 program cycle as appropriate 37 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 Appendices Figure 1 Adopted Incentive Mechanism Earnings/Penally Curve AL Earnings capped at$450 million Reward (% of ER= 12% PEB) ER=9% 0% 65% 85% 100% % of CPUC goals (per unit below 5C/kWh,$25/kW 45 a/therm P CPUC Penalty capped below goals, or payback of goal) negative net benefits (cost- at$450 million Penalty effectiveness guarantee) ------------------------------------------- Earnings = ER x PEB PEB= Performance Earnings Basis ER= Earnings Rate (or Shared- Savings Rate) 38 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 Appendices 39 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 Appendices APPENDIX B GLOSSARY COMMON ENERGY EFFICIENCY TERMS AND DEFINITIONS Adopted Program Budget The program budget as it is adopted by the Commission Inclusive of costs (+/-) recovered from other sources Advanced Technologies Measures or processes which exceed the efficiency or thermodynamic performance of standard energ using equipment or processes Affiliate Any person, corporation, utility, partnership, or other entity 5% or more of whose outstanding securities are owned, controlled, or held with power to vote, directly or indirectly either by an administrator or any of its subsidiaries, or by that administrator's controlling corporation and/or any of its subsidiaries as well as any company in which the administrator, its controlling corporation, or any of the administrator's affiliates exert substantial control over the operation of the company and/or indirectly have substantial financial interests in the company exercised through means other than ownership For purposes of these Rules, "substantial control" includes,but is not limited to, the possession, directly and indirectly and whether acting alone or in conjunction with others, of the authority to direct or cause the direction of the management of policies of a company A direct or indirect voting interest of five percent (5%) or more by the administrator, its subsidiaries, or its affiliates in an entity's company creates a presumption of control Avoided Costs Avoided costs refers to the incremental costs avoided by the investor-owned utility when it purchases power from qualifying facilities, implements demand-side management, such as energy efficiency or demand-response programs, or other wise defers or avoids generation from existing/new utility supply-side investments or energy purchases in the market Avoided costs also encompass the deferral or avoidance of transmission and distribution-related costs (D 08-01-006, Footnote 2) Baseline Data The initial base metric for comparing the net result of programmatic changes versus what would have happened in the absence of the program or activity 1 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 Appendices Coincident Peak Demand The metered or estimated demand of a device, circuit, or building that occurs at exactly the same time as the systempeak for a given year and weather condition Community Choice Aggregators Organizations created by local governments pursuant to Assembly Bill 117 for the purpose of procuring power and administering energy efficiency programs on behalf of local citizens Competitive solicitation The process whereby parties are requested to submit bids offering innovative approaches to energy savings or improved program performance Conservation Reduction of a customer's energy use achieved by relying on changes to the customer's behavior which may result in a lower level of end use service Conservation Measures Activities and/or behaviors aimed at reducing energy consumption Conservation Programs Programs which are intended to influence customer behavior as a means to reduce energy use Cost Effectiveness An indicator of the relative performance or economic attractiveness of any energy efficiency investment or practice when compared to the costs of energy produced and delivered in the absence of such an investment Cream Skimming Cream skimming results in the pursuit of a limited set of the most cost-effective measures, leaving behind other cost-effective opportunities Cream skimming becomes a problem when lost opportunities are created in the process Cross Subsidization Benefits enjoyed by one group, such as a customer class, which are funded by another group 2 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 Appendices Customer Any person or entity that pays an electric and/or gas bill to an IOU and that is the ultimate consumer of goods and services including energy efficiency products, services, or practices Cumulative Savings As clarified in D 07-10-032, cumulative savings represent the savings in that year from all previous measure installations (and reflecting any persistence decay that has occurred since the measures were installed) plus the first-year savings of the measures installed in that program year Dual Test The requirement that an energy efficiency actlygy pass both the TRC and the PAC cost- effectiveness test E3 Calculator The E3 calculator is a model developed by Energy Environmental Economics (or "E3' for use by the utilities to map Commission-adopted avoided costs to energy efficiency programs for cost-effectiveness calculations Effective Useful Life (EUL) An estimate of the median number of years that the measures installed under the program are still in place and operable Electricity Savings Reduced electricity use (or savings) produced by either energy efficiency investments which maintain the same level of end use service or conservation actions which usually reduce energy use by reducing the quantity or quality of the baseline energy services demanded Emerging Technologies New energy efficiency technologies, systems, or practices that have significant energy savings potential but have not yet achieved sufficient market share (for a variety of reasons) to be considered self sustaining or commercially viable Emerging technologies include early prototypes of hardware, software, design tools or energy services that if implemented will result in energy savings Emissions Reductions The Commission requires annual reporting of reduced emissions of carbon dioxide (CO2), sulfur oxides (SOx), nitrous oxides (NOx), and particulate matter (PM10) as a result of energy efficiency savings avings The utilities use the E3 calculator to compute the 3 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 Appendices annual electric and natural gas emissions reductions, which are the units implemented in the year times the annual emission reduction for a particular measure The E3 calculator calculates values of CO2 in tons per kWh or therms, NOx and PM10 are in pounds per kWh or therms The following eequations are from the 'E3 Calculator Tech Memo' found at the following web link http //www ethree com/CPUC/E3%20Calculator%20TechMemo%203c doc Emissions Reductions Electric Reductions CO2 tons Per year (Emisslon(EWCO2n Emission[E][CO2]y = I(INM o *kWh_AM *NTGM *ER[CO2]A4 0=1+(y-1) 4 Where ,y = year of consideration 2006= 1 Total Annual used for years 2008 through the end of the implementation period O = Quarter of the year Jan Mar 2006= 1 INS _ #of incremental of measures implemented in quarter 0 NTGM = Net—to Gross ratio for measure M ER CO2 M = Emission rate of CO2 in tons per kWh of measure M (The emissions rate for each measure is calculated using,the product of the hourly measure savings load shape and the hourly heat rate for the IOU) kWh A— = Annual kWh reduction for measure M NOX and PM 10 equations are the same Just replace W021 with the appropriate indicator Note that CO2 emission rate is in tons per kWh NOX and PM 10 are in pounds per kWh Gas Reductions CO2 tons per year (Emission(GI[CO27) Emission[G][CO2]y = 4(INM *Th_AM *NTGM *ER[CO21((, Where y = ,year of consideration 2006= 1 Total Annual used for years 2008 through the end of the implementation period Q = Quarter of the year Jan Mar 2006= 1 INS _ #of incremental of measures implemented in quarter 0 NTGM, = Net—to Gross ratio for measure M ER CO2 GcT = Emission rate of CO2 in tons per therm based on the gas combustion type(GCT) specified on the input sheet for the measure 4 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 Appendices Th AA, = Annual gas reduction(in therms)for measure M NOX and PM 10 equations are the same Just replace [CO21 with the appropriate indicator Note that CO2 emission rate is in tons per Therm NOX and PM 10 are in pounds per Therm Energy Efficiency Groupware Application 2006 (EEGA2006) The utilities post monthly and quarterly status reports to the EEGA2006 webpage, which is accessible to the public http Hee a2g 006 cpuc ca gov End Use 1) The purpose for which energy is used e heating,eatin , cooling,ooling, li htg ina) 2) A class of energy use that an energy efficiency program is concentratingefforts forts upon Typically categorized by equipment purpose, equipment energy use intensity, and/or building_typee Energy Efficiency Activities or programs that stimulate customers to reduce customer energy use by making_investments in more efficient equipment or controls that reduce energy use while maintaining a comparable level of service as perceived by the customer Energy Efficiency Measure An energy using_appliance, equipment, control system, or practice whose installation or implementation results in reduced energy use (purchased from the distribution utility) while maintaining a comparable or higher level of energy service as perceived by customer In all cases energy efficiency measures decrease the amount of energy used to provide a specific service or to accomplish a specific amount of work (eg kWh per cubic foot of a refrigerator held at a specific temperature, therms per gallon of hot water at a specific temperature, etc) For the purpose of these Rules, solar water heating and stand-alone solar-powered water circulators are eligible energy efficiency measures (Per D 07-11-004, OP 1 ) Energy Efficiency Programs Programs that reduce customer energy use by promoting energy efficiency investments or the adoption of conservation practices or changes in operation which maintain or increase the level of energy services provided to the customer Energy Efficiency Savings The level of reduced energy use (or savings) resulting from the installation of an energy efficiency measure or the adoption of an energy efficiency practice, subject to the condition that the level of service after the investment is made is comparable to the baseline level of service The level of service may be expressed in such ways as the 5 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 Appendices volume of a refrigerator, temperature levels,production output of a manufacturing facility, or lightinglevel evel per square foot Evaluation, Measurement and Verification (EM&V) Activities which evaluate, monitor, measure and verify performance or other aspects of energy efficiency programs or their market environment Evaluation Project Budget The project level evaluation budget as it is defined by the program administrators or Toint Staff for internal program budgeting and management purposes Inclusive of direct and allocated overhead and costs (+/-) recovered from other sources Financial Incentive Financial support (e g ,rebates, low interest loans, free technical advice) provided to customers as an attempt to motivate the customers to install energy efficient measures or undertake energy efficiency projects See Rebate) Free Drivers A free driver is a non-participant who adopted a particular efficiency measure or practice as a result of a utility program (From April 2006 EM&V Protocols) Free riders (Free Ridership) Program participants who would have installed the program measure or equipment in the absence of the program Fuel Substitution Programs which are intended to substitute energy using equipment of one energy source with a competing energy source ,e g switch from electric resistance heating to gasfurnaces) Funding Cycle Period of time for which fundingof f energy efficiency programs have been approved by the Commission Gas Savings Reduced natural gas usage (or savings) produced by either energy efficiency investments which maintain the same level of end use service or conservation actions which can reduce energy use by reducing the quanta , or quality of the baseline services provided 6 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 Appendices Hard to Reach,Non Residential Those customers who do not have easy access to program information or generally do not participate in energy efficiency programs due to a language, business size, geographic, or lease (flit incentive) barrier These barriers are defined as Language - Primary language spoken is other than English, and/or Business Size - Less than ten employees and/or classified as Very Small, and/or Geographic - Businesses in areas other than the San Francisco Bay Area,San Diego area, Los Angeles Basin or Sacramento, and/or Lease - Investments in improvements to the building benefit the business only during the lease period, landlords benefit longer Hard to Reach, Residential Those customers who do not have easy access to program information or generally do not participate in energy efficiency programs due to a language, income, housing type, geographic, or home ownership (split incentives) barrier These barriers are defined as Language - Primary language spoken is other than English, and/or Income -Those customers who fall into the moderate income level (income levels less than 400% of the federal poverty guidelines), and/or Housing Type - Multi-family and Mobile Home Tenants, and/or Geographic - Businesses in areas other than the San Francisco Bay Area,San Diego area, Los Angeles Basin or Sacramento, and/or Home Ownership - Renters Incremental Measure Cost The additional cost of purchasing and installing a more efficient measure Calculated from the price differential between energy-efficient equipment and standard or baseline measures The inclusion of the word "gross' in the definition reflects incremental measure costs, which have not been adjusted for free riders Net incremental measure costs means that the term has been adjusted for free riders, i e , the net-to-gross ratio has been applied Information & Education Information and education programs can provide a wide range of activities designed to inform or educate a customer or customer group Generally these range from in-depth, one-on-one, on-site or centrally located classroom style instruction in topics related to energy efficiency, to programs that target information to specific types of customers, to general information provided to a wide range of customers, to short inexpensive public service announcements on FCC approved communication frequencies Programs intended to provide customers with information regarding_generic (not customer- 7 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 Appendices specific) conservation and energy efficiency opportunities For these programs, the information may be unsolicited by the customer Innovation Incubator A low-cost, stand-alone program designed to grow innovative energy saving_programs and processes for the larger portfolio over the long term The incubator funds new program ideas that meet reasonable scientific scrutiny for potentially cost-effective energy savings and Beak reduction Institutional Barriers A type of market barrier In this case, the internal organizational hurdles that inhibit the evaluation and or choice to take energy efficiency actions Least Cost/Best Fit The procurement of cost-effective supply and demand-side resources that, regardless of ownership, meet capacity and energy deliverability requirements Energy efficiency resources are constructed from the bottoms up approach that aggregates the demand and energy savings from various energy-saving measures and activities into applicable end-use categories such as space cooling, space heating, lighting,and refrigeration, in order to provide near-and long-term peaking, intermediate, and baseload requirements Levelized Cost An estimate of the annualized cost of installing an energy efficiency measures divided by the annual energy savings Typically calculated by multiplying the incremental cost of the measure by capital recovery factor (function of discount rate and expected useful life of the measure) and then dividing by annual energy savings Load Management Programs which reduce or shift electric peak demand away from periods of high cost electricity to non-peak or lower cost time periods,with a neutral effect on or negligible increase in electric use Load Serving Entities Entities that provide electric and/or gas commodity to customers Lost Opportunities Energy efficiency measures that offer long-lived, cost-effective savings that are fleeting in nature A lost opportunity occurs when a customer does not install an energy 8 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 Appendices efficiency measure that is cost-effective at the time, but whose installation is unlikely to be cost-effective if the customer attempts to install the same measure later Market Effect A market effect is a change in the structure or functioning of a market or the behavior of participants in a market that result from one or more program efforts Typically these efforts are designed to increase in the adoption of energy-efficient products, services or practices and are causally related to market interventions (From EM&V Protocols, April 2006) Market Transformation Decision (D) 93-04-063, Appendix A, defines market transformation as "fl)ong,_ lasting, sustainable changes in the structure or functioning of a market achieved by reducing barriers to the adoption of energy efficiency measures to the point where further publicly-funded intervention is no longer appropriate in that specific market " Marketing and Outreach Communications activities designed to identify, reach and motivate potential customers to take actions to either learn more about or invest in energy efficiency opportunities Measures 1) Specific customer actions which reduce or otherwise modify energy end use patterns 2) A product whose installation and operation at a customer's premises results in a reduction in the customer s on-site energy use, compared to what would have happened otherwise Minimum Performance Standard (MPS) As part of the Shareholder Incentive Mechanism, the minimum performance standard is the minimum level of savings that utilities must achieve relative to their savings goal before accruing earnings and is expressed as a percentage of the Commission-adopted savings goals per utility The utility MPS is based on the whole energy efficiency portfolio and the minimum goal of each individual savings metric (See Rule VIII) Net to Gross Ratio A ratio or percentage of net progam impacts divided by gross or total impacts Net to gross ratios are used to estimate and describe the free-ridership that may be occurring within energy efficiency programs 9 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 Appendices Non-price Factors Those factors included in cost effectiveness tests, other than commodity prices and transportation and distribution costs, e g, environmental factors Operating Program Budget The program budget as it is defined by the program administrators for internal program budgeting and management purposes Inclusive of costs (+/-) recovered from other sources Participant Test The Participant Test is the measure of the quantifiable benefits and costs to the customer due to participation in a program Since many customers do not base their decision to participate in a program entirely on quantifiable variables, this test cannot be a complete measure of the benefits and costs of a program to a customer (See SPM link under Attachment A ) Partnership Coordinated efforts of a utility and a local government or other entity to use the strengths of both parties to achieve energy savings goals Peak Demand (per OP 1 of D 06-06-063) The average grid level impact for a measure between 2 p m and 5 p m during the three consecutive weekday period containing the weekday temperature with the hottest temperature of the e'er Peak Demand-General (kW) 1) The maximum level of metered demand during a specified period, such as a billing month, or during a specified peak demand period 2) Extremely high energy use, usually with reference to a particular time period Peak Savings- Coincident (kVlI) The estimated peak (e g highest) demand savings (MW or kW) from a program for a specific time, date, and location coincident with the forecasted system peak fora given area and a given set of weather conditions This estimate must also include consideration of the likelihood that the equipment is actually on at the time of coincident peak Usage of this definition Resource planning-for making adjustments to forecasts of peak usage for understanding reserve margins and reliability purposes Peak Savings- Daily Average (kW) The average peak demand savings (kWh impacts/ # of hours in the peak rate period) for a given utility during their peak season Example for SCE-Peak period is for summer 10 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 Appendices weekdays from 12-6 PM So- dais average savings would be the number of kWh saved/ # of kWhs saved for all weekday peak periods = kWh/5 days/week* 12 weeks/ summer* 6 hours/day = kW average Usage Cost effectiveness analysis, primarily for valuing energysavings avings that occur during the peak period using"peak" average avoided costs Peak Savings -Non coincident (kW) Estimated highest level of peak savings( kW or MW) fora given program during the peak time period for a given utility on the hottest day of a "normal" weather year Thus if a group of measures saved 1MW at 2Pm, 1 7 MW at 3PM, 16 MW at 4PM, 10 MW at 5Pm and 12 MW at 6 pm, the peak non coincident savings would be 17 MW This savings estimate does not take into account how many of the affected devices or equipment will be operating during the peak time period Usage Cost effectiveness analysis and procurement Peer Review Group (PRG) A subset of the Program Advisory Group consisting of non-financially interested members who will review utility submittals to the Commission, assess overall portfolio plans, plans for bidding out Pieces of the portfolio, and the bid evaluation criteria for selecting third-party programs Performance Basis The metrics by which a program or a group of pr teams is measured and evaluated for the purpose of assessing the program(s) success at displacing or deferring more costly supply-side resources and or increasing more energy_efficient design and practices Performance Earnings Basis (PEB) A metric used in the shareholder incentive mechanism consisting of total portfolio net benefits (TRC) weighted 2/3rdand total Program Administrator Cost (PAC) portfolio net benefits weighted 1/3rd (See Rule VIII ) Performance Uncertainties A market barrier refers to new technologies or systems whose efficiency or sy system performance levels are uncertain due to lack of experience Portfolio All IOU and non-IOU energy efficiency_programs funded by ratepayers that are implemented during a program year or cycle May also refer to a group of programs sponsored, managed, and contracted for by a particular IOU 11 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 Appendices Portfolio Reporting Regularly scheduled reporting by the portfolio administrators directly to the CPUC Metrics reported are portfolio budgets and expenditures, measures installed, services rendered, and other program activity deemed relevant to Energy Division's responsibility to support the Commissions responsibilities of quality assurance, policy oversight, and EM&V Pre-commercialization A phase in the life of a product before it is readily available on the market Program A collection of defined activities and measures that ® are carried out by the administrator and/or their subcontractors and implementers, ® target a specific market segment, customer class, a defined end use, or a defined set of market actors (e g designers, architects, homeowners), ® are designed to achieve specific efficiency related changes in behavior, investment practices or maintenance practice in the energy market, • and are guided by a specific budget and implementation plan Program Activities Any action taken by the program administrator or program implementer in the course of implementing the program Program Administrator An entity tasked with the functions of portfolio management of energy efficiency progrrams and program choice Program Administrator Cost (PAC) Test Under portfolio evaluation of cost effectiveness, the PAC test contains the program benefits of the TRC test,but costs are defined differently to include the costs incurred by the program administrator but not the costs incurred by the participating customer (See the SPM link under Attachment A ) Program Advisory Group (PAG) Advisory groups for each utility service area composed of energy efficiency experts representing customer groups, academic organizations, environmental organizations, agency staff and trade allies in the energy market For 2007 and beyond, the Public Advisory Group (PAG) is eliminated while the Peer Review Group (PRG) is retained Per Decision 07-10-032, the advisory function formerly performed by the PAG will be subsumed in the statewide strategic planning activity 12 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 Appendices Program Cycle The period of time over which a program is funded and implemented Program Implementation Plan A detailed description of a program that includes program theory, planned program processes, expected program activities, program budget, projected energy savings and demand reduction and other program plan details as required by the Commission, assigned ALT, or Energy Division Program Implementers An entity or person that puts a program or part of a program into practice based on contacts or agreements with the portfolio manager Program Strategy The set of activities deployed by the program in order to achieve the program's objectives Program Year(s) The calendar years during which the program operates Ratepayer Those customers who pay for gas or electric service under regulated rates and conditions of service Rebate A financial incentive paid to the customer in order to obtain a specific act, typically the installation of energy efficient equipment Report Month The month for which a particular monthlyport is providing data and information For example, the report month for a report covering the month of Tuly 2006,but prepared and delivered later than Tuly 2006,would be July 2006 Resource Value An estimate of the net value of reliable energy (e g ,kWh, therms) and capacity (e g, kW, Mcfd) reductions resulting from an energy efficiency program This includes the 13 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 Appendices net present value of all of the costs associated with a program and all of the estimated benefits (both energy and capacity) The calculation of resource value and associated benefits should be consistent with the avoided costs adopted in the most recent Commission proceeding or otherwise provided for by the Commission Service Area The geographical area served by a utility Short Term/Long Term Planning terms referring to the timing or expected timing of program activities, program impacts, or program funding Short term indicates program activities, program impacts, or program funding that occurs during the current program cycle Long term indicates program activities, pro gain m impacts, or program funding that occurs beyond the current pro 2:am cycle Source-BTU Consumption Conversion of retail energy forms kWh, therms) into the BTU required to generate and deliver the energy to the site This conversion is used to compare the relative impacts of switching between fuel sources at the source or BTU level for the three-prong test required for fuel-substitution programs Spillover Reductions in energy consumption and/or demand in a utility's service area caused by the presence of the DSM program,m, beyond progam related gross or net savings of participants These effects could result from (a) additional energy efficiency actions that program participants take outside the program as a result of having participated, (b) changes in the array of energy-using equipment that manufacturers, dealers and contractors offer all customers as a result of program availability, and c changes in the energy use of non-participants as a result of utility programs, whether direct (e g, utility program advertising) or indirect (e g, stocking practices such as (b) above or changes in consumer buyinghabits)abits) " Participant spillover is described by a), and non- participant spillover, by (b) and (c) Some parties refer to non-participant spillover as "free-drivers " (From EM&V Protocols, April 2006) Standard Practice Manual (SPM) The California Standard Practice Manual Economic Analysis of Demand-side Programs and Projects is jointly issued by the California Public Utilities Commission and the California Energy Commission It defines the standard cost effectiveness tests and their components used for energy efficiency programs 14 R 06-04-010 DGX/ays EE Policy Manual Version 4 0 Appendices Statewide Energy efficiency programs or activities that are essentially similar in design and available in all Commission regulated utility service areas in California Third PartV/Non-IOU Non-regulated implementers of ratepayer funded energy efficiency activities Total Resource Cost Test (TRC) The TRC test measures the net resource benefits from the perspective of all ratepayers by combining the net benefits of the program to participants and non-participants The benefits are the avoided costs of the supply-side resources avoided or deferred The TRC costs encompass the cost of the measures/equipment installed and the costs incurred by the program administrator (See SPM link under Attachment A) Zero Net Energy Zero Net Energy is defined as the implementation of a combination of building energy efficiency design features and on-site clean distributed generation that result in no net purchases from the electricity or gas grid, at the level of a single "project" seeking development entitlements and buildingcode ode permits Definition of zero net energy at this scale enables a wider range of technologies to be considered and deployed, including district heating and cooling systems and/or small-scale renewable energy projects that serve more than one home or business (D 07-10-032, Footnote 42) (END OF APPENDIX B) 15 EXHIBIT D REPORTING REQUIREMENTS 1 Reporting 1 1 Cities shall provide SCG with the requisite information in accordance with the Agreement on the prior month s activities accomplishments and expenditures related to its respective Authorized Work or Approved Project obligations for purposes of preparing the Monthly Quarterly and Annual Reports 12 SCG shall provide Cities in accordance with the provisions of the Agreement a copy of its filed Monthly Report within five(5)Business Days after filing 2 Quarterly Report 21 Portfolio Benefit/Cost Metrics(Cumulative to Date) a Total cost to billpayers(TRC administrative cost and incremental cost per the Standard Practice Manual) b Total savings to billpayers(TRC) c Net benefits to billpayers(TRC) d TRC Ratio e PAC Ratio f Cost per kWh saved(cents/kWh)(PAC) g Cost per therm savings($/therm)(PAC) 22 Measure List—A spreadsheet table for each program or program element2 containing each measure installed service rendered or measure/service committed during the report month for which the Program intends to claim savings Cities should include any new measures as part of the quarterly report The list should display each measure as it is tracked and recorded by Cities and should include the following parameters at a minimum a Name of Measure or Service Rendered b Measure or Service Description c Customer name and applicable SCG account number d Installation site address e Affected square footage f Applicable NAICS code g DEER Measure ID(where applicable) h DEER Run ID(where applicable) i Unit Definition J Unit gross kWh savings k Unit gross Therms savings 1 Unit gross kW demand reduction in Incremental Measure Cost n Net to Gross Ratio o Effective Useful Life Identification of distinct programs and program elements may be determined by CPUC staff at a later time 2010-12 Orange County Cities Partnership Program Agreement p Detailed end use classification(using classification scheme in section 6) q Quantity Installed during report period r Quantity Committed during report period s Rebate amount paid t Market Sector classification(using classification scheme in section 6) u Market Segment classification(using classification scheme in section 6) 23 Expenditures for the program per cost reporting format below(Section 7 below contains list of allowable costs) h Commission Authorized Budget I Operating Budget J Total Expenditures i Administrative Cost ii Marketmg/Advertising/Outreach Costs in Direct Implementation 24 GBI Report—Progress towards achieving goals of the Green Budding Initiative if applicable(Cumulative results) a Estimate of expenditures on program activities that contribute towards GBI goals (including both public and non public commercial participants) b Net cumulative achieved kW kWh and Therm savings contributing towards GBI goals c Net achieved kW kWh and Therm savings contributing towards GBI goals for the quarter d A description of non resource program activities that support the Green Building Initiative including marketing and outreach activities e Estimate of square footage affected by program activities supporting the Green Building Initiative f Items b c and e above disaggregated by 1 2 digit NAICS code u Aggregated end use classification(using classification scheme in section 5) 25 Program Narratives—For the program a description of the program activities occurring during the quarter k Administrative activities 1 Marketing activities in Direct Implementation activities n Implementer s assessment of program performance and program status(is the program on target exceeding expectations or falling short of expectations etc) o For non resource programs and program elements(programs or program elements that are not claiming direct energy impacts) a discussion of the status of program achievements p Discussion of changes in program emphasis(new program elements less or more emphasis on a particular delivery strategy program elements discontinued measure discontinued etc) q Discussion of near term plans for program over the coming months(e g marketing and outreach efforts that are expected to significantly increase program participation etc) r Changes to staffing and staff responsibilities if any s Changes to contacts if any t Changes to subcontractors and subcontractor responsibilities if any u Number of customer complaints received v Program Theory and Logic Model if not already provided in the program s implementation plan or if revisions have been made 26 Quarterly Reports—SCG shall provide CITIES a copy of its filed Quarterly Report within five(5)Business Days after filing with the Commission in accordance with the Agreement 3 Annual Reports The format and content of the annual report is expected to be developed by the CPUC m 2010 CITIES will be required to fulfill these reporting obligations for their program 4 Reporting Terminology Definitions Adopted Program Budget—The program budget as it is adopted by the Commission Inclusive of costs (+/ )recovered from other sources Operating Program Budget—The program budget as it is defined by the program administrators for internal program budgeting and management purposes Inclusive of costs(+/ )recovered from other sources Direct Implementation Expenditures—Costs associated with activities that are a direct interface with the customer or program participant or recipient(e g contractor receiving training) (Note This as stall an open issue the items included an this definition may be changed by the CPUC pending discussion on the application of the State s Standard Practice Manual) Report Month—The month for which a particular monthly report is providing data and information For example the report month for a report covering the month of July 2010 but prepared and delivered later than July 2010 would be July 2010 Program Strategy—The method deployed by a program in order to obtain program participation Program Element—A subsection of a program or body of program activities within which a single program strategy is employed (Example A body of program activities employing both an upstream rebate approach and a direct install approach is not a single program element) 5 Measure Classification Measure End Use Classification Each energy efficiency measure reported should be classified into one of the following end use categories Residential End tjvec Detailed End Use Aggregated End Use Clothes Dryer Appliances Clothes Washer Appliances Consumer Electronics Consumer Electronics Cooking Cooking Appliances Dishwasher Appliances Other Appliance Appliances Building Shell HVAC Space Cooling HVAC Space Heating HVAC Interior Lighting Lighting Exterior Lighting Lighting Pool Pump Pool Pump Freezers Refrigeration Refrigeration Refrigeration Water Heating Water Heating Other(User Entered Text String Description) Other 'Vnnresidential End Uses Detailed End Use Aggregated End Use Building Shell HVAC Space Cooling HVAC Space Heating HVAC Ventilation HVAC Daylighting Lighting Interior Lighting Lighting Exterior Lighting Lighting Office Equipment Office Compressed Air Process Cooking Process Food Processing Process Motors Process Process Cooling Process Process Heat Process Process Steam Process Pumps Process Refrigeration Refrigeration Other(User Entered Text String Description) Other Measure Market Sector/Market Segment Classification Where reports require market sector or market segment classification the following classification scheme should be used Market Sector Market Segment Residential NA Single Family NA Multi Family NA Mobile Homes NA Nonresidential NAICS CODE (greater than 2 digit not required) Commercial NAICS CODE(greater than 2 digit not required) Industrial NAICS CODE(greater than 2 digit not required) Agricultural NAICS CODE(greater than 2 digit not required) Unknown NA 6 Allowable Costs Allowable Costs Table The cost items listed on the Allowable Costs sheet are the only costs that can be claimed for ratepayer funded energy efficiency work The costs reported should be only for costs actually expended Any financial commitments are to be categorized as commitments If the reporting entity does not have a cost as listed on the cost reporting sheet then no cost is to be reported for that item These Allowable Cost elements are to be used whenever costs are invoiced or reported to the program administrator If there is a desire to include additional Allowable Cost elements the program administrator should be contacted in order for the administrator to seek a roval from the CPUC 3/30/2006 Cost Categories Allowable Costs Admen►stratnc Cost Category -Managerial and Clerical Labor IOU Labor Clerical IOU Labor Program Design IOU Labor Program Development IOU Labor Program Planning IOU Labor Program/Project Management IOU Labor Staff Management IOU Labor Staff Supervision Subcontractor Labor Clerical Subcontractor Labor Program Design Subcontractor Labor Program Development Subcontractor Labor Program Planning Subcontractor Labor Program/Project Management Subcontractor Labor Staff Management Subcontractor Labor Staff Supervision Human Resource Support and Development IOU Labor Human Resources IOU Labor Staff Development and Training IOU Benefits Administrative Labor IOU Benefits Direct Implementation Labor IOU Benefits Marketm /Advertising/Outreach Labor IOU Payroll Tax Administrative Labor IOU Payroll Tax Administrative Labor IOU Payroll Tax Administrative Labor IOU Pension Administrative Labor IOU Pension Direct Implementation Labor IOU Pension Marketing/Advertising/Outreach Labor Subcontractor Labor Human Resources Subcontractor Labor Staff Development and Training Subcontractor Benefits Administrative Labor Subcontractor Benefits Direct Implementation Labor Subcontractor Benefits Marketing/Advertising/Outreach Labor Subcontractor Payroll Tax Administrative Labor Subcontractor Payroll Tax Direct Implementation Labor Subcontractor Payroll Tax Marketing/Advertising/Outreach Labor Subcontractor Pension Administrative Labor Allowable Costs Table The cost items listed on the Allowable Costs sheet are the only costs that can be claimed for ratepayer funded energy efficiency work The costs reported should be only for costs actually expended Any financial commitments are to be categorized as commitments If the reporting entity does not have a cost as listed on the cost reporting sheet then no cost is to be reported for that item These Allowable Cost elements are to be used whenever costs are invoiced or reported to the program administrator If there is a desire to include additional Allowable Cost elements the program administrator should be contacted in order for the administrator to seek a roval from the CPUC 3/30/2006 Cost Categories Allowable Costs Subcontractor Pension Direct Implementation Labor Subcontractor Pension Marketing/Advertising/Outreach Labor Travel and Conference Fees IOU Conference Fees IOU Labor Conference Attendance IOU Travel Airfare IOU Travel Lodging IOU Travel Meals IOU Travel Milea e IOU Travel Parkin IOU Travel Per Diem for Misc Expenses Subcontractor Conference Fees Subcontractor Labor Conference Attendance Subcontractor Travel Airfare Subcontractor Travel Lodging Subcontractor Travel Meals Subcontractor Travel Mileage Subcontractor Travel Parking Subcontractor Travel Per Diem for Misc Expenses Overhead General and Administrative Labor and Materials IOU Equipment Communications IOU Equipment Computing IOU Equipment Document Reproduction IOU Equipment General Office IOU Equipment Transportation IOU Food Service IOU Office Supplies IOU Postage IOU Labor Accounting Support IOU Labor Accounts Payable IOU Labor Accounts Receivable IOU Labor Administrative i IOU Labor Facilities Maintenance IOU Labor Materials Management IOU Labor Procurement IOU Labor Shop Services IOU Labor Transportation Services IOU Labor Automated Systems IOU Labor Communications �I Allowable Costs Table The cost items listed on the Allowable Costs sheet are the only costs that can be claimed for ratepayer funded energy efficiency work The costs reported should be only for costs actually expended Any financial commitments are to be categorized as commitments If the reporting entity does not have a cost as listed on the cost reporting sheet then no cost is to be reported for that item These Allowable Cost elements are to be used whenever costs are invoiced or reported to the program administrator If there is a desire to include additional Allowable Cost elements the program administrator should be contacted in order for the administrator to seek a roval from the CPUC 3/30/2006 Cost Categories Allowable Costs IOU Labor Information Technology IOU Labor Telecommunications Subcontractor Equipment Communications Subcontractor Equipment Computing Subcontractor Equipment Document Reproduction Subcontractor Equipment General Office Subcontractor Equipment Transportation Subcontractor Food Service Subcontractor Office Supplies Subcontractor Postage Subcontractor Labor Accounting Support Subcontractor Labor Accounts Payable Subcontractor Labor Accounts Receivable Subcontractor Labor Facilities Maintenance Subcontractor Labor Materials Management Subcontractor Labor Procurement Subcontractor Labor Shop Services Subcontractor Labor Administrative Subcontractor Labor Transportation Services Subcontractor Labor Automated Systems Subcontractor Labor Communications Subcontractor Labor Information Technology Subcontractor Labor Telecommunications Marketing/A{IN ci tisina/Outs each C ost Catt gory IOU Advertisements/Media Promotions IOU Bill Inserts IOU Brochures IOU Door Hangers IOU Print Advertisements IOU Radio Spots IOU Television Spots IOU Website Development IOU Labor Marketing IOU Labor Media Production IOU Labor Business Outreach IOU Labor Customer Outreach IOU Labor Customer Relations Subcontractor Bill Inserts Subcontractor Brochures 1 Allowable Costs Table The cost items listed on the Allowable Costs sheet are the only costs that can be claimed for ratepayer funded energy efficiency work The costs reported should be only for costs actually expended Any financial commitments are to be categorized as commitments If the reporting entity does not have a cost as listed on the cost reporting sheet then no cost is to be reported for that item These Allowable Cost elements are to be used whenever costs are invoiced or reported to the program administrator If there is a desire to include additional Allowable Cost elements the program administrator should be contacted in order for the administrator to seek a roval from the CPUC 3/30/2006 Cost Categories Allowable Costs Subcontractor Door Hangers Subcontractor Print Advertisements Subcontractor Radio Spots Subcontractor Television Spots Subcontractor Website Development Subcontractor Labor Marketing Subcontractor Labor Media Production Subcontractor Labor Business Outreach Subcontractor Labor Customer Outreach Subcontractor Labor Customer Relations Direct Implementation Cost Cate orti Financial Incentives to Customers Active -Direct Labor IOU Labor Curriculum Development IOU Labor Customer Education and Training IOU Labor Customer Equipment Testing and Diagnostics IOU Labor Facilities Audits Subcontractor Labor Facilities Audits Subcontractor Labor Curriculum Development Subcontractor Labor Customer Education and Training Subcontractor Labor Customer Equipment Testing and Diagnostics Installation and Service Labor IOU Labor Customer Equipment Repair and Servicing IOU Labor Measure Installation Subcontractor Labor Customer Equipment Repair and Servicing Subcontractor Labor Customer Equipment Repair and Servicing Direct Implementation Hardware and Materials IOU Audit Applications and Forms IOU Direct Implementation Literature IOU Education Materials IOU Energy Measurement Tools IOU Installation Hardware Subcontractor Direct Implementation Literature Subcontractor Education Materials Subcontractor Energy Measurement Tools Subcontractor Installation Hardware Subcontractor Audit Applications and Forms Rebate Processing and Inspection Labor and Materials IOU Labor Field Verification Allowable Costs Table The cost items listed on the Allowable Costs sheet are the only costs that can be claimed for ratepayer funded energy efficiency work The costs reported should be only for costs actually expended Any financial commitments are to be categorized as commitments If the reporting entity does not have a cost as listed on the cost reporting sheet then no cost is to be reported for that item These Allowable Cost elements are to be used whenever costs are invoiced or reported to the program administrator If there is a desire to include additional Allowable Cost elements the program administrator should be contacted in order for the administrator to seek a roval from the CPUC 3/30/2006 Cost Categories Allowable Costs IOU Labor Site Inspections IOU Labor Rebate Processing IOU Rebate Applications Subcontractor Labor Field Verification Subcontractor Labor Rebate Processing Subcontractor Rebate Applications ATTACHM EN T '#�3- INSURANCE AND INDEMNIFICATION WAIVER MODIFICATION REQUEST C E I . Hunon 'Bmchm F �,-... DEC 2 2 2009 1. Requested by: Aaron Klemm City of Huntington Bga:; i 2. Date: December 18, 2009 city Attorneys office 3. Name of contractor/permittee: Southern California Edison & Southern California Gas Compan 4. Description of work to be performed: No work will be performed by SCE or SCG, contract provides incentive funding mechanism for HB. 5. Value and length of contract: TBD by subsequent work authorizations, 36 months 6. Waiver/modification request: Contract proposes full cross indeminification and hold harmles 7. Reason for request and why it should be granted: Indemnification between HB and SCE is already captured in PUC administrative law and the associated approved service tariffs 8. Identify the risks to the City in approving this waiver/modification: There are no known risks to the indeminification clauses in the partnership agreements. Depaftment Head Signature Date: APPROVALS Approvals must'.be obtained in the order listed on this form. Two approvals are required for a request to be granted. Approval from the City Administrator's Office is only required if Risk Management and th City Attorneys Office disagree.: 1. Pi" Management Approved ❑ Denied L Signature Date 2. City Attorney's Office `proved ElDenied k". /a` �3 d�j Signature Date 3. City Administrator's Office ❑ Approved ❑ Denied Signature Date If approved, the completed waiver/modification request is to be submitted°to the City Attorneys Office along with the contract for approval. Once the contract has been approved, this form is to be filed with the Risk Management Division of Human Resources Insurance Waiver Form 12/18/2009 2:57:00 PM RCA ROUTING SHEET INITIATING DEPARTMENT: Administration SUBJECT: SCE &SCG Partnership contracts COUNCIL MEETING DATE: January 19, 2010 RCA ATTACHMENTS STATUS Ordinance (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable ❑ Resolution (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable ❑ Tract Map, Location Map and/or other Exhibits Attached ❑ Not Applicable ❑ Contract/Agreement (w/exhibits if applicable) Attached (Signed in full by the City Attome Not Applicable ❑ Subleases, Third Party Agreements, etc. Attached ❑ (Approved as to form by City Attome Not Applicable ❑ Certificates of Insurance (Approved by the City Attomey) Attached ❑ Not Applicable ❑ Fiscal Impact Statement (Unbudgeted, over$5,000) Attached ❑ Not Ap licable ❑ Bonds (If applicable) Attached ❑ Not Applicable ❑ Staff Report (If applicable) Attached ❑ Not Applicable ❑ Commission, Board or Committee Report (If applicable) Attached ❑ Not Applicable tEll Findings/Conditions for Approval and/or Denial AttachedNot Ap licable EXPLANATION FORAISSING ATTACHMENTS REVIEWED RETURNED FOR A ED Administrative Staff Deputy City Administrator Initial City Administrator Initial City Clerk EXPLANATION FOR RETURN OF ITEM: fflelowa . o • RCA Author: Aaron Klemm Page 1 of 1 Esparza, Patty From: Klemm, Aaron Sent: Monday, January 25, 2010 10:43 AM To: Esparza, Patty Subject: RE: questions on contracts Patty: I am not quite sure where the initiated and approved field is. Is it on the RCA? Then it should be Bob Hall. Fred's signature would be sufficient for SCE. he effective date should be 1/1/2010.' The cover sheet can be the 1/19/2010 date of the council meeting. You can go ahead and send it to SCE for their signature,just let me know when you send it so I can give them a heads up. From: Esparza, Patty Sent: Friday, January 22, 2010 1:30 PM To: Klemm, Aaron Subject: questions on contracts Importance: High Hi Aaron — I have a couple of questions on the contracts that went to council Monday night. The first question is in regards to the Professional Services Contract with Digital Energy, Inc. Somehow, that contract(and the duplicate) got by everyone without a signature in the"Initiated and Approved"field. Who should sign there? Next, on the OC Partnership Program with So. Cal. Edison, there is only one signature line for a city signature. Do you want me to have Fred or Cathy sign there? Also, what date should be on the cover sheet, and what is the effective date on page 2? Should that be our council meeting date or will SCE be filling that in after they sign? After our city signatures are secured, do you also want this contract back or do you want me to send it to SCE at the address reflected on page 23? As soon as you let me know, I will set up.appointments to execute the contracts. Thanks for your help! Patty Esparza, CMC Senior Deputy City Clerk City of Huntington Beach 714-536-5260 `please think of trees before you print 1/25/2010 L L CITY OF HUNTINGTON BEACH �J TO: Honorable Mayor Cathy Green and City Council Members FROM: Fred A. Wilson, City Administrator DATE: January 14th, 2010 SUBJECT: LATE Communication: Agreement to Jointly Deliver Orange County Cities Energy Efficiency Partnership Program Southern California Gas Company submitted a late and updated contract for the Agreement to Jointly Deliver Orange County Cities Energy Efficiency Partnership Program agenda item. The changes were made based on comments from other partner cities refining some terms and the addition of Fountain Valley to the energy efficiency partnership. The attached Southern California Gas agreement is to be substituted_for the previous version in the agenda item. A summary of the changes is provided below: 1. The term Utility is replaced with Southern California Gas Company or (SCG). 2. The term Partnership is replaced by Program throughout the document. 3. The dates 2010-2012 describing the Program are deleted. 4. Record retention requirements are reduced from 10 to 5 years. 5. The term Project is replaced with Project or Measure. a 6. Fountain Valley is added to the Partnership program 7. Public Goods Charge (PGC) is replaced with Gas Surchage Funds 8. Formatting and Fonts were updated to be uniform throughout the document. _ Fred.wilsonnsurkity-Wor 714.536.5575 AGREEMENT TO JOINTLY DELIVER THE 2010-2012 ORANGE COUNTY CITIES ENERGY EFFICIENCY PARTNE7HIP PROGRAM BY AND AMONG THE CITY OF COSTA MESA THE CITY OF HUNTINGTON REACH THE CITY OF WESTMINSTER AND SOUTHERN CALIFORNIA GAS COMPANY DATED: January 1,2010 This program is funded b California utility ratepayers and administered by the Utilities under the auspices of the California Public Utility Commission. El x' N z 2010-12 Orange County Cities Partnership Program Agreement THIS AGREEMENT TO JOINTLY DELIVER THE 2010-2012 ORANGE COUNTY CITIES ENERGY EFFICIENCY PARTNERSHIP PROGRAM (the "Agreement") by and arnong the City of Costa Mesa, the City of Huntington Beach, the City of Westminster (the "Cities") and Southern California Gas Company ("SCG"), is effective as of January 1, 2010 ("Effective Date"). SCG may be referred to herein individually as the "Utility." The Utility and the Cities maybe referred to herein individually as a "Party" and collectively as the "Parties." The Orange County Cities Energy Efficiency Partnership may be referred to herein as the"Partnership." WHEREAS, on July 21, 2008, as amended on March 2, 2009, SC submitted the Application ("Application") for Approval of 2009-2011 Energy Efficiency Programs to he California Public Utility Commission (the "Commission") to be delivered to SCG customers for/the years 2009 through 2011, which included the SCG Local Government Partnership Program (the/Program") in which SCG will partner with cities, counties, and other local government organZe.09-09-047 s to deliver the Program in the Cities within SCG service territory; WHEREAS, on October 1, 2009, the Commission in authorized certain energy efficiency programs and budgets which include the SCG Local/Government Partnership Program to be delivered to SCG customers for the years 2010 through 2012; WHEREAS, the Cities has expressed commitmeynts, and has qualified, to participate in the Program through the Partnership, allowing the Cities to achieve immediate and long-term energy savings in their own facilities and to demonstrate energy efficiegncy leadership in their communities while helping residents and businesses achieve sustainable reduction/in energy use within SCG service territory; WHEREAS, the Partnership Program is designed to encompass several local government jurisdictions that include City of Costa Mesa, City of Huntington Beach and City of Westminster (the "Cities"); WHEREAS, the Parties desire to eater into an agreement that supersedes any and all previous agreements, and sets forth the terms and conditions under which the Program shall be implemented with respect to the Parties. NOW THEREFORE, for valuable consideration, the receipt and sufficiency of which is hereby acknowledged,the Parties agree as follows: 1. DEFINITIONS All terms used in the singular will be deemed to include the plural, and vice versa. The words "herein," "hereto," and "hereunder" and words of similar import refer to this Agreement as a whole, including all exhibits or other attachments to this Agreement, as the same may from time to time be amended or supplemented, and not to any particular subdivision contained in this Agreement, except as the context clearly requires otherwise. "Includes" or "including" when used herein is not intended to be exclusive, or to limit the generality of the preceding words, and means "including without limitation." The word "or" is not exclusive. u 2010-12 Orange County Cities Partnership Program Agreement I 1.1. Agreement: This document and all exhibits attached hereto, and as amended from time to time. 1.2. Amendment: A future document executed by the authorized representatives of all Parties which changes or modifies the terms of this Agreement. 1.3. Authorized Partnership Budget: The Commission approved maximum budget for funding the performance of Authorized Work by all Parties of the Partnership as set forth in the Programs Implementation Plans attached hereto as Exhibit A. 1.4. Authorized Work: The work authorized by the Commission for the Programs as set forth in this Agreement and as more fully described in the Programs Implementation Plans attached hereto as Exhibit A, and as agreed to be performed by the Parties/ 1.5. Business Day: The period from one midnight to the following midnight, excluding Saturdays, Sundays, and holidays. 1.6. Calendar Day: The period from one midnight/to the following midnight, including Saturdays, Sundays, and holidays. Unless otherwise specified, all days in this Agreement are Calendar Days. 1.7. Contractor: An entity contracting directly/o indirectly with a Party, or any subcontractor thereof subcontracting with such Contractor, to furnish services or materials as part of or directly related to such Parry's Authorized Work obligati ons. 1 G 1.8. Customers or Eligible Customers:JThose customers eligible for 2010-2012 Program services, which are SCG customers locatedwithin the jurisdiction of the Cities, and may include the city itself. 1.9. EM&V: Evaluation, Measurement and Verification of the Programs pursuant to Commission requirements. 1.10. Energy Efficiency Measure (or Measure): As used in the Commission's Energy Efficiency Policy Manual, Version 4, August 2008, as supplemented or updated from time to r time. �f 1.11. Public Goods Charge (PGC): The funds collected from electric utility ratepayers pursuant to Section 381 Hof the California Public Utility Code for public purposes programs, including energy efficiency programs approved by the Commission. 1.12. Gas Surcharge The funds collected from gas utility ratepayers pursuant to Section 890 et al. of the California Public Utility Code for public purposes programs, including energy efficiency programs approved by the Commission. E 1.13. Incentive: As used in the Commission's Energy Efficiency Policy Manual, Version 4, August 2008, as supplemented or updated from time to time. 1.14. Partner Budget: That portion of the Authorized Partnership Budget, which represents the maximum budget and maximum allocation by period, for funding the performance of the 2010-12 Orange County Cities Partnership Program Agreement 2 Program by the Cities and as set forth in Exhibit B, subject to amendments/byyhe Utility consistent with the terms of this Agreement. 1.15. Program Expenditures: Actual (i.e., no mark-up for profit, administrative or other indirect costs), reasonable expenditures of the Cities that are pre-approved, directly identifiable to and required for the Authorized Work in accordance with Section 10.3. fiy 1.16. PIP or Program Implementation Plan: The implementation plan specific to this Partnership, together with SCG Local Government Partnership Master PIP, which include the anticipated scope of the Program in SCG service territory, approved by the Commission and attached hereto as Exhibit A. a 2. PURPOSE r' The Program are funded by California utility ratepayers and is administered by the Utility under the auspices of the Commission. The purpose of this Agreement is to set forth ,r the terms and conditions under which the Parties will jointly implement the Program. The work authorized pursuant to this Agreement is not to be performed for profit. fa; This Agreement is not intended to and does not not form any "partnership" within the meaning of the California Uniform Partnership�Act of 1994 or otherwise. a,. 3. PROGRAM DESCRIPTION a e 3.1. Overview. The 2010-2012Orange Cities Energy Efficiency Partnership Program is designed to provide integrated technical and financial assistance to help local governments effectively toincrease energy efficiency, reduce greenhouse gas emissions, increase renewable,/energy usage, protect air quality and ensure that their communities are more livable and sustainable. The Program provides access to all SCG core programs to increase energy efficiency in local government facilities and their communities through energy saving actions, including retrofitting their municipal facilities as welfas providing opportunities for constituents to take action in their homes and businesses. By implementing measures in Cities' own facilities, the Cities will build their local capacity for energy efficiency and sustainability as the Cities and the Utility work together to increase community awareness of energy efficiency and position the Cities as leaders in sustainable energy management practices. The Program will provide marketing, outreach, education and training to connect the community with opportunities to save energy, money and help the environment. The'Parties will leverage the strengths of each other to efficiently deliver energy savings. Delivering sustainable energy savings, promoting energy efficiency lifestyles, and achieving an enduring local government capacity for the Cities through this Program design is rooted in the effective relationship among the Cities,their constituents, and the Utility. /7 4. AUTHORIZEWWN ORK 4.1. Scope. The work authorized by the Commission is set forth broadly in the PIP (Exhibit A) and shall be performed pursuant to the terms of this Agreement. The Parties shall collaborate and mutually agree upon specific Program 2010-12 Orange County Cities Partnership Program Agreement 3 implementation consistent with the PIP, and the Parties shall document such r details in a "Planning Document" which is intended to evolve throughout the term of the Program. 4.2. Objectives. The Programs is designed to meet the specific goals and milestones set forth in Exhibit B of this Agreement, while implementing the Program strategies and meeting the general objectives and,,goals set forth in the PIP, attached hereto as Exhibit A. f f" f 5." LIMITATION ON SERVICE TERRITORY — The Parties agree that Authorized Work shall only be performed in SCG service territory, with energy savings claims applicable solely to SCG utility system. No Authorized Work shall be performed for any customers that receive natural gas from a municipal utility corporation or other natural gas service provider or that do not directly receive gas service from SCG. Nothing in this Section f5 is intended to preclude Program coordination with other municipal utilities. 6. OBLIGATIONS OF THE PARTIES fy 6.1. Obligations of the Utility and the Cities f. 6.1.1. Each Party will be re'ponsible for the overall progress of its 41 Authorized Work, to ensure that the Programs remains on target (including but not limited to achieving the Program's specific energy savings and demand4eduction goals as set forth in Exhibit B). 6.1.2. The Parties shalljointly coordinate and prepare all Program-related documents, including all required reporting pursuant to Section 9, and any such ther reporting as may be reasonably requested by the Utility. 6.1.3. To the extent practicable and with coordination by the Utility, the Parties shall use the Program as a portal for other existing or selected/programs that the Utility offers, including programs targeting low-income customers, demand response, self-generation, solar/and other programs as described in the PIP, with a goal to enhance consistency in rebates and other Program details, minimize duplicative administrative costs, and enhance the possibility that programs can be marketed together to avoid duplicative marketing expenditures. 6.1.4T Consistent with those contained in the PIP, the Utility and the Cities will work together to develop and accomplish additional mutually 1, agreeable goals. 6.2. Obligations of the Cities. Y i 2010-12 Orange County Cities Partnership Program Agreement 4 6.2.1. Each City shall appoint an "Energy Champion" who will be the primary contact among the City, other Cities, and Xthe Utility's Energy Efficiency Representative (defined in Section 6.:3.1), and who will be authorized to act on behalf of the City in carrying out the City's obligations under this Agreement. Such appointment shall be communicated in writing to the Utility within ,10 Business Days following execution of this Agreement. ' 6.2.2. Each City shall communicate regularly with the Utility's Energy Efficiency Representatives in accordance ip th Section 7.2 and 7.3 hereof, and shall advise the Utility immediately of any problems or delays associated with its Authorized Work obligations. 6.2.3. The Cities shall perform their Authorized Work obligations within the Partner Budget and in conformance with the schedule and goals associated with such Authorized Work as set forth in this Agreement, and shall furnish the required labor, equipment and material with the degree of skill, care and professionalism that is required by current professional standards. 6.2.4. Each City will be actively;involved in all aspects of the Program. Each City will use its best/ efforts to (a) dedicate human resources necessary to implement/the Program successfully, (b) providing support for the Program marketing and outreach activities, and (c) working to enhance ;.communications with the Utility to address consumer needs. 1�,I/ 6.2.5. The Cities shall obtain the approval of the Utility when developing Program marketing materials and prior to their distribution, publication, circulation, or dissemination in any way to the public. In addition, all, advertising, marketing or otherwise printed or reproduced material used to implement, refer to, or that is in any way related/to the Programs must contain the respective name and logo of the Utility and, at a minimum, the following language: "This Prograrrm�is funded by California utility ratepayers and administered iv by Southern California Gas Company under the auspices of the Calif rnia Public Utility Commission." 6.2.6. The Cities shall obtain the approval of the Utility prior to conducting ayn.y Program public outreach activities (exhibits, displays, public presentations, canvassing, etc.) and any marketing materials used in /;/connection with such outreach activity shall comply with the requirements of Section 6.2.4. 6.2�7. The Cities shall submit to the Utility, upon its request, all contracts, }"1 agreements or other requested documents with the Cities' Contractors (including subcontractors) performing Authorized Work in connection with the Programs. 2010-12 Orange County Cities Partnership Program Agreement 5 r s 6.2.8. Each City acknowledges and agrees that the Program h other cities a as Parties under this Agreement, and that no one City is entitled to the entire Authorized Partnership Budget, and that the City shall work with the Utility and each other Cities to achieve the goals and accomplish the Authorized Work of the Programs. 6.3. Obligations of SCG. f 6.3.1. SCG will appoint a Partnership representative ("SCG Energy Efficiency Representative") who will be the"primary contact for the Cities, and who will be authorized to act on behalf of SCG in carrying out SCG's obligations under this Agreement. Such appointment shall be communicated in writing to the Cities within 10 Business Days following execution of this Agreement' 6.3.2. SCG will be actively involved in all aspects of the 2010-2012 Program. SCG will use its best efforts to add value to the 2010-2012 Program by (a) dedicating human resource`s necessary to implement the 2010- 2012 Program successfully and providing and maintaining a SCG presence in the Cities, (b)` providing support for the 2010-2012 Program's marketing and',/`outreach activities, and (c) working to enhance communications(/with the Cities to address consumer needs and provide SCG information and services. 6.3.3. SCG shall provide,sgat no cost to the Cities informational and educational materials on SCG's core programs. 4/ 6.3.4. SCG shall be responsible for coordinating and ensuring compliance with all SCG reporting and other SCG filing requirements. 6.4. EM&V. Once the/`Commission has approved and issued an evaluation, measurement and verification ("EM&V") plan for the Programs, such EM&V plan shall be attached to this Agreement as Exhibit D and shall be incorporated herein by this reference. Any'subsequent changes or modifications to such EM&V plan by the Commission shali be automatically incorporated into Exhibit D. The Cities shall provide and comply with all Commission/Utility' requests regarding activities related to EM&V' The Cities and its Contractors shall cooperate fully with the Utility' Energy Efficiency Representative and will provide all requested information, if any, to assure the timely completion of all EM&V Plan tasks requiring the Cities' involvement or cooperation. J> I 2010-12 Orange County Cities Partnership Program Agreement 6 7. ADMINISTRATION OF PROGRAM 7.1. Decision-making and Approval. 7.1.1. Except as specifically provided in this Agreement, ;the following actions and tasks require consent of both Parties: a. Any material modification to the Authorized Work in connection with the Programs. j/ b. Any action that materially impacts the agreed-upon schedule for implementing the Programs. C. Selection of any Contractor not previo sly approved by the Utility. 7.1.2. Unless otherwise specified in this Agreement, the Parties shall document all material Program desions, including, without limitation, all actions specified in Section 7.1.1 above, in meeting minutes or if taken outside a� meeting, through written communication, which shall be maintained in hard copy form on file by the Parties for a period of no/less than ten (10) years after the expiration or termination of this Agreement. 7.2. Regular Meetings. During the term of this Agreement, the Cities' representatives ("Energy Champions") /f the Partnership identified in writing pursuant to Section 6.2.1 and 6.3.1 respectively, along with such members of the Partnership team as the Parties deem necessary or appropriate, shall meet monthly at a location reasonably agreed upon/by the Parties. In addition to any other agenda items requested by either Party, the agenda shall include a review the status of the Cities' performance against Par ner Budget, toward achievement of the goals set forth in Exhibit B, and the Partnership's progress towards meeting overall Partnership goals set forth in/Exhibit A. Any decision-making shall be reached and documented in accordance with the requirements of Section 7.1 above. 7.3. Regular Communication. Regular communication among Partnership representatives is critical for the long-term success of the Partnership and achievement of Partn/ership goals and objectives. Notwithstanding Section 7.2, above, the Partnership representatives identified in writing by each Partner pursuant to Sectio / 6.2.1 and 6.3.1, respectively shall communicate regularly with each other to rev Zw the status of the Programs' goals, deliverables, schedules and budgets, and plan for upcoming Program implementation activities, and to advise the other Part of any problems associated with successful implementation of the Programs. A4 decision-making during this communication process shall be reached and documented in accordance with the requirements of Section 7.1 above. 7.4. Non-Responsibility for Other Party. Notwithstanding anything contained in this Agreement in the contrary, a Party shall not be responsible for the performance or non-performance hereunder of the other Party, nor be obligated to remedy any other Party's defaults or defective performance. f 2010-12 Orange County Cities Partnership Program Agreement 8. DOUBLE DIPPING PROHIBITED In performing its respective Authorized Work obligations, the Cities shallimplement the following mechanism and shall take other practicable steps to minimize double- dipping: /f 8.1. Prior to providing incentives or services to an Eligible Customer, the Cities and its Contractors shall obtain a signed form from such Eligible'Customer stating that: 8.1.1. Such Eligible Customer has not received incentives or services for the same measure from any other Utility's program or from another utility, state, or local program; and 8.1.2. Such Eligible Customer agrees not to apply for or receive incentives or services for the same measure from any other Utility's program or from another utility, state, or local program. Each Party shall keep its Customer-signed forms for at least five (5) years aft er the expiration or termination of this Agreem/arn� 8.2. No Party shall knowingly providncentive to an Eligible Customer, or make payment to a Contractor, who is receiving compensation for the same product or service either through another ratepayer funded program, or through any other funding source. 8.3. Each City represents and warrants that it or its Contractors has not received, and will not apply for; or accept incentives or services for any measure provided for herein or offered pursuant to this Agreement or the Programs from any other Utility' program or from7any other utility, state or local program. 8.4. The Parties shall tak"e reasonable steps to minimize or avoid the provision of incentives or services for/the same measures provided under the Programs from another program or other funding source ("double-dipping"). 9. REPORTING 9.1. Reporting Requirements. The Parties shall implement those reporting requirements set/forth in Exhibit E attached hereto, as the same may be amended from time to tine, or until the Commission otherwise requires or issues different or updated reporting requirements for the Programs, in which case and at which time such Commission-approved reporting requirements shall replace the requirements set forth in Exhibit E in their entirety. 10. PAYMENTS 10.1. Partner Budget 2010-12 Orange County Cities Partnership Program Agreement 8 10.1.1. Maximum Budget: The Partner Budget is set forth in/Exhibit B to this Agreement and represents the Cities' maximum share of the Programs' three-year Authorized Partnership Budget. dditionally, Exhibit B sets forth the maximum non-incentive budget on a periodic basis during the Programs. The Cities shall not be entitled to compensation in excess of the Partner Budget (either on a periodic basis or in total), without written authorization .by the Utility and receipt of a revised Exhibit B. Consistent with Commission directives to maximize cost-effectiveness and energy savings, the Partner Budget set forth in Exhibit B may be reallocated or adjusted at any time by the Utility in its sole discretion, based upon Utility' evaluation of the Cities' commitment to/and progress toward the Cities' energy savings goals set forth herein. 10.1.2. Tracking: SCG will track the/Cities' performance against the SCG goals and objectives set forth in Section 4.2 hereof, including tracking (or estimating) achievement towards the specific energy savings goals set forth in Exhibit/B. The tracking will enable SCG, to (i) report SCG Program status and achievement of respective goals and objectives, (ii) confirm or amend SCG portion of the Partner Budget, set forth in Exhibit B hereto, based on the Cities' performance of the SCG goals and objectives set forth in this Agreement; 10.1.3. Partner Budget Adjustment: The Parties acknowledge that this Partnership Program is offered in furtherance of the Commission's strategic energy efficiency goals for California and is based on the Cities' commitment to attain such goals and its desire to provide leadership to its community. To this end, in the event that the Utility determines, in its sole discretion and through the tracking mechanism setyforth in 10.1.2 above, that the Cities is not performing in accordance with the goals and objectives set forth in Section 4.2 hereof, then'such Utility shall have the unilateral right to reduce, eliminate, or otherwise adjust such Utility portion of the Partner Budget for the remaining Program year or years (other than for Program! Expenditures previously approved by such Utility) by amending Exhibit B and providing the amended Exhibit to the Cities. Pursuant to this Section, any such amended Exhibit B shall automatically be incorporated into this Agreement and take effect imi ediately upon delivery from such Utility to the Cities. 10.1.4. Partner Budget Categories a. Non-Incentive Budget: The Partner Budget is comprised of a non-incentive portion which includes separate categories for Marketing, Education & Outreach, Technical Assistance [and Direct Implementation], all of which are more fully described in the Programs Implementation Plan (Exhibit Q. 2010-12 Orange County Cities Partnership Program Agreement 9 b. Incentive Budget: SCG incentive budget in this Program is a part of incentive budget from its core programs.7he incentive level is up to $1.00 per therm for the calculated measures. Other incentives for deemed measures are in/accordance with the respective prescribed incentives for SCG core programs. 10.2. Program Expenditures of the Cities. The Cities, with Utility's prior approval, shall be entitled to spend Gas Surcharge funds, within the' limits of the Partner Budget, on Program Expenditures. The Cities shall not be entitled to reimbursement of Program Expenditures for any item (i)-.not specifically identifiable to the Programs, (ii) not previously approved by the Utility, (iii) not expended within the terms of this Agreement, or (iv) not otherwise reimbursable under this Agreement. 10.3. Payment to the City. In order for the City to be entitled to Gas Surcharge funds for Program Expenditures: 10.3.1.The City shall submit month y activity reports to SCG in a format acceptable to SCG and containing such information as may be required for the reporting requirements set forth in Section 9 above ("Monthly City Reports"), by the tenth (lOt") Calendar Day of the calendar month following performance, setting forth all Program Expenditures. 10.3.2.The City shall submit to SCG, together with any Monthly City Report, a monthly invoice for reimbursement of reported Program Expenditures, in a format acceptable to SCG, attaching all documentation reasonably necessary to substantiate the Programs Expenditur•'es, including, without limitation, the following: a. Contractor Costs: Copies of all Contractor invoices. If only a ,portion of Contractor costs applies to the Programs, the Cities shall clearly indicate the line items or percentage of the invoice amount that should be applied to the Programs as provided in Exhibit E. B. Marketing, Education & Outreach: A copy of each distinct marketing material produced, with quantity of a given marketing material produced and the method of distribution. C. Other expenditures: As pre-approved by SCG, with sufficient documentation to support the expenditure. d. Allowable Costs: Only those costs as listed in the Allowable Cost Table contained in the Reporting Requirements attached as Exhibit E can be submitted for payment. All invoices 2010-121 Orange County Cities Partnership Program Agreement 10 submitted to the Utility p must report all costs using the ® g allowable cost elements shown on the Allowable Cot Table. Each City understands and acknowledges that all of its invoices for the Programs and the Monthly City Report shall be submitted to SCG. 10.3.3.The Utility reserves the right to reject any City, invoiced amount for any of the following reasons:' a. The invoiced amount, when aggregated with previous Program Expenditures, exceeds the amount budgeted in the Partner Budget for such Authorized Work�(as set forth in Exhibit B). b. There is a reasonable basis�p. for concluding that such invoiced amount is unreasonable or is not directly identifiable to or required for the Authorized Work, and/or the Programs. C. The invoiced amount" , in SCG's sole discretion, contains charges for any item not authorized under this Agreement or by the Commission or is deemed untimely, unsubstantiated or lacking proper documentation. 10.3.4.The Cities shall maintain for a period of not less than ten (10) years all documentation reasonably necessary to substantiate the Programs Expenditures, including, without limitation, the documentation "set forth in Section 10.3.2 above. The Cities shall promptly provide, upon the reasonable request by SCG, any documentation, records or information in connection with the Programs or its Authorized Work. 10.3.5. SCG shall review and either approve, dispute or reject for payment to the reported Program Expenditures within twenty (20) Calendar Day the receipt of the Monthly City Report and corresponding City invoice. SCG shall pay all undisputed amounts after the ten (10) Calendar Day period described in Section 10.3.1, but within thirty (�3�0) Calendar Days of receiving the Monthly City Report and .corresponding City invoice. 10.3 PaynL of Incentives. Payment of Incentives to the City shall be made in accordance with the applicable SCG's program requirements, including terms and conditionst and only after appropriate program documents have been submitted and approved and the appropriate inspections of each Project have been completed to SCG's satisfaction. 10.4. Shifting Funds. SCG may shift funds within the Authorized Partnership Budget among the Cities, and/or may shift funds within Partner Budget among budget categories (Marketing, Education & Outreach, Direct Implementation and i 2010-12 Orange County Cities Partnership Program Agreement t i Incentives), which categories and budget amounts are set forth in Exhibit . Such shifting may be made by SCG to the maximum extent permitted and r, and in accordance with, Commission decisions and rulings to which the Progra r s relates. 10.5. Reasonableness of Expenditures. Each City shall bear the burden of ensuring that its Program Expenditures are objectively reasonable. The Commission has the authority to review all Program Expenditures for reasonableness. Should the Commission, at any time, issue a finding of unreasonableness as to any Program Expenditure and require a refund or return of the Gas Surcharge funds paid in the reimbursement of such Program Expenditure, such City shall be solely liable for such refund or return. 11. END DATE FOR PROGRAM AND ADMINISTRATIVE ACTTfIVITIES Unless this Agreement is terminated pursuant to Section 25 below, or unless otherwise agreed to by the Parties or so ordered by the Commission(, the Parties shall complete all Program Administrative activities (as defined in the PIpr)4f and all reporting requirements by no later than March 31, 2013, and all Direct Implementation and Marketing & Outreach activities by no later than December 31, 201Z 12. FINAL INVOICES Each City must submit final invoices to SCG no later than March 31, 2013. 13. INDEMNITY 13.1. Indemnity by the Cities. tThe Cities shall indemnify, defend and hold harmless the Utility, and its respective successors, assigns, affiliates, subsidiaries, current and future parent companies, officers, directors, agents, and employees, from and against any and all expenses, claims, losses, damages, liabilities or actions in respect thereof (including/reasonable attorneys' fees) to the extent arising from (a) the Cities negligence or willful misconduct in the Cities activities under the Programs or performance•of its obligations hereunder, or (b) the Cities' breach of this Agreement or of any representation or warranty of the Cities contained in this Agreement. 13.2. Indemnity by the Utility. The Utility shall indemnify, defend and hold harmless the Cities, and its respective successors, assigns, affiliates, subsidiaries, current and future parent companies, officers, directors, agents, and employees, from and againstlany and all expenses, claims, losses, damages, liabilities or actions in respect thereof (including reasonable attorneys' fees) to the extent arising from (a) the Utility"s negligence or willful misconduct in the Utility's activities under the Programs or! performance of its obligations hereunder or (b) Utility's breach of this Agreement/, or or any representation or warranty of the Utility contained in this Agreement. 13.3. LIMITATION OF LIABILITY. NO PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL OR CONSEQUENTIAL 2010-12 Orange County Cities Partnership Program Agreement 12 DAMAGES WHATSOEVER WHETHER IN CONTRACT, TORT (INCl JDING NEGLIGENCE) OR STRICT LIABILITY INCLUDING, BUT NOT LIMITED TO, LOSS OF USE OF OR UNDER-UTILIZATION OF LABOR OR FACILITIES, LOSS OF REVENUE OR ANTICIPATED PROFITS, COST OF REPLACEMENT POWER OR CLAIMS FROM CUSTOMERS, RESULTING FROM /A PARTY'S PERFORMANCE OR NONPERFORMANCE OF THE jOBLIGATIONS HEREUNDER, OR IN THE EVENT OF SUSPENSION OF THE AUTHORIZED WORK OR TERMINATION OF THIS AGREEMENT. 14. OWNERSHIP OF DEVELOPMENTS The Parties acknowledge and agree that SCG, on behalf of its Customers, shall own all data, reports, information, manuals, computer programs, works of authorship, designs or improvements of equipment, tools or processes (collectively "Developments") or other written, recorded, photographic or visual materials, or other deliverables produced in the performance of this Agreement; provided, however, tha Developments do not include equipment or infrastructure purchased for research, development, education or demonstration related to energy efficiency. Although the Cities shall retain no ownership, interest, or title in the Developments except as/nay otherwise be provided in this Agreement, it will have a permanent, royalty free, non-exclusive license to use such Developments. 15. DISPUTE RESOLUTION 15.1. Dispute Resolution. Except as may otherwise be set forth expressly herein, all disputes arising under this Agreement shall be resolved as set forth in this Section 15. 15.2. Negotiation and Mediation. The Parties shall attempt in good faith to resolve any dispute arising out of or'relating to this Agreement promptly by negotiations between the Parties' authorized representatives. The disputing Party shall give the other Party written notice/of any dispute. Within twenty (20) Calendar Days after delivery of such notice the authorized representatives shall meet at a mutually acceptable time and place, and thereafter as often as they reasonably deem necessary to exchange information and to attempt to resolve the dispute. If the matter has not beedresolved within thirty (30) Calendar Days of the first meeting, any Party may initiate a mediation of the dispute. The mediation shall be facilitated by a mediator that is acceptable to both Parties and shall conclude within sixty (60) Calendar Days/of its commencement, unless the Parties agree to extend the mediation process beyond such deadline. Upon agreeing on a mediator, the Parties shall enter into a written agreement for the mediation services with each Party paying a pro rata share of the mediator's fee, if any. The mediation shall be conductedlin accordance with the Commercial Mediation Rules of the American Arbitration Association; provided, however, that no consequential damages shall be awardeeA in any such proceeding and each Party shall bear its own legal fees and expenses. 2010-121Orange County Cities Partnership Program Agreement 13 15.3. Confidentiality. All negotiations and any mediation conducted pursuant to Section 15.2 shall be confidential and shall be treated as compromiseZnd settlement negotiations, to which Section 1152 of the California Evidence Code shall apply, which Section is incorporated in this Agreement by reference. 15.4. Injunctive Relief. Notwithstanding the foregoing provisions, a Party may seek a preliminary injunction or other provisional judicial remedy if in tts judgment such action is necessary to avoid irreparable damage or to preserve the status quo. 15.5. Continuing Obligation. Each Party shall continue to performth its obligations under this Agreement pending final resolution of any dispute arising out of or relating to this Agreement. 15.6. Failure of Mediation. If, after good faith efforts to mediate a dispute under the terms of this Agreement as provided in Section 15.2above, the Parties cannot agree to a resolution of the dispute, any Party may pursue whatever legal remedies may be available to it at law or in equity, before a court of competent jurisdiction and with venue as provided in Section 15.2. 16. REPRESENTATIONS AND WARRANTIES 16.1. Representation of both Parties. EacVParty represents and warrants, as of the Effective Date and thereafter during term of this Agreement, that: 16.1.1.The Authorized Work performed by a Party and/or its Contractors shall comply with the/applicable requirements of all statutes, acts, ordinances, regulations, codes, and standards of federal, state, local and foreign governments, and all agencies thereof. 16.1.2.The Authorize d/"Work performed by a Party and/or its Contractors shall be free of any claim of trade secret, trade mark, trade name, copyright, or patent infringement or other violations of any proprietary rights of any person. 16.1.3. Each Party shall conform to the applicable employment practices requirements of (Presidential) Executive Order 11246 of September 24,,/1965, as amended, and applicable regulations promulgated thereunder. 16.1.4yEach Party shall contractually require each Contractor it hires to perform the Authorized Work to indemnify each other Party to the same extent such Party has indemnified each other Party under the terms and conditions of this Agreement. 16.1.5.Each Party shall retain, and shall cause its Contractors to retain, all records and documents pertaining to its Authorized Work obligations for a period of not less than five (5) years beyond the termination or expiration of this Agreement. 2010-12'Orange County Cities Partnership Program Agreement 14 16.1.6.Each Party shall contractually require all of its Contractor to provide the other Parties reasonable access to relevant recor and staff of Contractors concerning the Authorized Work. 16.1.7.Each Party will maintain, and may require its Contractors to maintain, the following insurance coverage or self insurance coverage, at all times during the term of this Agreement, with companies having an A.M. Best rating of "A-, VID or better, or equivalent: (i) Workers' Compensation/Employer's Liability or Equivalent: statutory minimum. (ii) Commercial General Liability: $2 million minimum per occurrence/$4 million minimumggregate. (iii) Commercial or Business Auto�if applicable): $1 million minimum. (iv) Professional Liability (if applicable): $1 million minimum. 1.6.1.8 Each Party shall take all reasonable measures, and shall require its Contractors to take all reasonable measures, to ensure that the Programs funds in its possession are used solely for Authorized Work, which measures shall/include the highest degree of care that such Party uses to control its own funds, but in no event less than a reasonable degree of care` 17. PROOF OF INSURANCE 17.1. Evidence of Insurance. Upon request at any time during the term of this Agreement, a Party shall provide evidence that its insurance policies (and the insurance policies of any Contractor, as provided in Section 16.8) are in full force and effect, and provide thelcoverage and limits of insurance that the Party has represented and warranted herein to maintain at all times during the term of this Agreement. 17.2. Self-Insurance/ If a Party is self-insured, such Party shall upon request forward documentation to the other Party that demonstrates to the other Party's satisfaction that such Party self-insures as a matter of normal business practice before commencing the Authorized Work. Each Party will accept reasonable proof of self-insurance inparable to the above requirements. 'I. 17.3. Notice of Claims. Each Party shall immediately report to the other Party, and promptly thereafter confirm in writing, the occurrence of any injury, loss or damage incurred by such Party or its Contractors or such Party's receipt of notice or knowledge of any claim by a third party of any occurrence that might give rise to such a claim over $100,000. r 2010-12 Orange County Cities Partnership Program Agreement 15 18. CUSTOMER CONFIDENTIALITY REQUIREMENTS 18.1. Non-Disclosure. Subject to any disclosures required pursuant to the Public Records Act, the Cities, its employees, agents and Contractors shall not dsclose any Confidential Customer Information (defined below) to any third party/during the term of this Agreement or after its completion, without the Cities having obtained the prior written consent of such Utility, except as provided by law, lawful court order or subpoena and provided the Cities gives such Utility advance written notice of such order or subpoena. l/C;ustomer Information" 18.2. Confidential Customer Information. "Confide ntia , includes, but is not limited to, an Utility customer's .name, address, telephone number, account number and all billing and usage information, as well as such Utility customer's information that is marked "confidential". If the City is uncertain whether any information should be considered Confidential Customer Information, the City shall contact the Utility prior to disclosing the customer information. 18.3. Non-Disclosure Agreement. Prior to any approved disclosure of Confidential Customer Information, Utility may require the City to enter into a nondisclosure agreement. 18.4. Commission Proceedings. This provision does not prohibit the Cities from disclosing non-confidential inform/ation concerning the Authorized Work to the Commission in any Commission proceeding, or any Commission-sanctioned meeting or proceeding or other public forum. 18.5. Return of Confidential Information. Confidential Customer Information (including all copies, backups and abstracts thereof) provided to the Cities by a Utility, and any and all documents and materials containing such Confidential Customer Information or produced by the Cities based on such Confidential Customer Informat)on (including all copies, backups and abstracts thereof), during the performance of this Agreement shall be returned upon written request by such Utility. 1 18.6. Remedies. The Parties acknowledge that Confidential Customer Information is valuable and unique, and that damages would be an inadequate remedy for breach of his Section 18 and the obligations of the Parties are specifically enforceable. Accordingly, the Parties agree that in the event of a breach or threatened breach of this Section 18 by such City, the respective Utility shall be entitled to seek and obtain an injunction preventing such breach, without the necessity of proving damages or posting any bond. Any such relief shall be in addition to, and not in lieu of, money damages or any other available legal or equitable remedy. 19. TIME IS OF THE ESSENCE 2010-12 Orange County Cities Partnership Program Agreement 16 The Parties hereby acknowledge that time is of the essence in performing their obligations under this Agreement. Failure to comply with milestones and goals stated in this Agreement, including but not limited to those set forth in Exhibit B of this Agreement, may constitute a material breach of this Agreement, resulting in its termi tion, payments being withheld, Partner Budgets being reduced or adjusted, funding redi ected by Utility to other programs or partners, or other Program modifications as determi ed by the Utility or as directed by the Commission. 20. CUSTOMER COMPLAINT RESOLUTION PROCESS The Parties shall develop and implement a process for the management and resolution of Customer complaints in an expedited manner including, but not limited to: (a) ensuring adequate levels of professional Customer service staff; (b direct access of Customer complaints to supervisory and/or management personnel; ( �"" documenting each Customer complaint upon receipt; and (d) directing any Customer complaint that is not resolved within five (5) Calendar Days of receipt by the Cities to the Utility. 21. RESTRICTIONS ON MARKETING 21.1. Use of Commission's Name. No Part may use the name of the Commission on marketing materials for the Programs ithout prior written approval from the Commission staff. In order to obtain this ritten approval, the .Utility must send a copy of the planned materials to the ommission requesting approval to use the Commission name a/nd logo. Notwithstanding the foregoing, the Parties shall disclose their sourcfunding f the Programs by stating prominently on marketing materialsthe Prog ams is "funded by California ratepayers under the auspices of the Cia Pub 'c Utility Commission." 21.2. Use of Utilite. he Cities must receive prior review and written approval from the Utor e use of such Utility's name or logo on any marketing or other Program ms The Cities shall allow five (5) Business Days for such Utility review and a 1. If the Cities have not received a response from such Utility within the fiBusiness Day period, then it shall be deemed that such Utility has disapprovch use.21.3. Use of the Ciame. The Utility must receive prior review and written approval from the ity for the use of such City's name or logo on any marketing or other Program in Lterials. The Utility shall allow five (5) Business Days for the City's review an approval. If the Utility has not received a response from the Cities within the five ) Business Day period, then it shall be deemed that the Cities has disapproved s h use. 22. RIGHT TO AU IT The Parties grees that the other Party, and/or the Commission, or their respective designated representatives, shall have the right to review and to copy any records or supporting documentation pertaining to the their performance of this Agreement or the Authorized Work, during normal business hours, and to allow reasonable access in order to 2010-12 Orange County Cities Partnership Program Agreement 17 interview any staff of the Cities or the Utility who might reasonably have information related to such records. Further, the Parties agrees to include a similar right of the other Party and/or the Commission to audit records and interview staff in any subcontract related to performance of the Authorized Work or this Agreement. 23. STOP WORK PROCEDURES The Utility may suspend the Authorized Work being performed in its service territory for good cause, including, without limitation, concerns relating to program funding, implementation or management of the Programs, safety concerns, fraud or excessive customer complaints, by notifying the Cities in writing to suspend any Authorized Work being performed in such Utility's service territory. Any performance of Authorized Work by the Cities in such Utility's service territory shall stop immediately, and the Cities may resume its Authorized Work only upon receiving written notice from such Utility that it may resume its Authorized Work. 24. MODIFICATIONS Except as otherwise provided in this Agreement, changes to this Agreement shall be only be valid through a written amendment to this Agree r,ent signed by both Parties. 25. TERM AND TERMINATION 25.1. Term. This Agreement shall be effect' e as of the Effective Date. Subject to Section 37, the Agreement shall continu�in effect until June 30, 2013 unless otherwise terminated in accordance with the provisions of Section 25.2 or 30 below. Notwithstanding the June 30, 2013 to mination date, all Direct Implementation and Marketing & Outreach activities sliall be completed by no later than December 31, 2012 in accordance with Sectio 11 of this Agreement. In accordance with Sections 11 and 12 respectively, al reporting and invoicing shall be completed by March 31, 2013. 25.2. Termination for Breach. 25.2.1.Any Party ma terminate this Agreement in the event of a material breach by the other Party of any of the material terms or conditions of this Agree ent, provided such breach is not remedied within sixty (60) days ritten notice to the breaching Party thereof from the non- breachin ' Party or otherwise resolved pursuant to the dispute resoluti n provisions set forth in Section 15 herein. 25.2.2.Any Party may terminate this Agreement without cause by providing at least (60) days written notice to the other Party. 25.3. Any Party may terminate this Agreement in the event of a material breach by the other Party of any of the material terms or conditions of this Agreement, provided such breach is not remedied within sixty (60) days written notice to the 2010-12 Orange County Cities Partnership Program Agreement 18 breaching Party thereof from the non-breaching Party or otherwise resolved pursuant to the dispute resolution provisions set forth in Section 15 herein. 25.4. Effect of Termination. Any termination by all of the Cities or,by all of the Utility shall constitute a termination of this Agreement in its entirety (subject, however, to the survival provisions of Section 36). 25.4.1. Subject to the provisions of this Agreement, the Cities shall be entitled to PGC or Gas Surcharge Funds r/for all Program Expenditures incurred or accrued pursuant to contractual or other legal obligations for Authorized Work up to the effective date of termination of this Agreement, provided that any Monthly City Reports or other reports, invoices, documents or information required under this Agreement or by the Commission are submitted in accordance with the terms and conditions of this Agreement. The provisions of this Section 25.3.1 shall be/a Party's sole compensation resulting from any termination of this Agreement. 25.4.2. In the event of termination of this Agreement in its entirety, the Cities shall stop any Authorized Work in progress and take action as directed by the Lead Utility to��`bring the Authorized Work to an orderly conclusion, and the Parties shall work cooperatively to facilitate the termination of operations and of any applicable contracts for Authorized Wor /. 25.4.3. In the event of a partial termination of this Agreement by a Utility, the remaining Utility, at its sole option without waiving any other rights as may be provid-d for in this Agreement, or in law or equity, may elect to continuer he 2010-2012 Program jointly as continuing parties to this Agreement. 26. WRITTEN NOTICES Any written notice, demand or re .uest required or authorized in connection with this Agreement, shall be deemed proper, y given if delivered in person or sent by facsimile, nationally recognized overnight courier, or first class mail, postage prepaid, to the address specified below, or to another addr�ss specified in writing by a Party as follows: The Cities: SCG: City of Huntington Beach Southern California Gas Company Aaron Klemm Paulo Morais, Energy Programs Supervisor 2000 Main Street. 555 W. Fifth Street, GT28A4 Huntington Beach, CA 926 8 Los Angeles, CA 90013 Tel: (213) 244-3246 Fax: (213) 244-8252 2010-12 Orange County Cities Partnership Program Agreement 19 City of Costa Mesa City of Westminster Notices shall be deemed received (a) if personally or hand-delivered, upon the date of delivery to the address of the person to receive such notice if delivered before 5:00 p.m., or otherwise on the Business Day following personal delivery; (�/if mailed, three (3) Business Days after the date the notice is postmarked; (c) if `by facsimile, upon electronic confirmation of transmission, followed by telephone notification of transmission by the noticing Party; or (d) if by overnight courier, on the Business Day following delivery to the overnight courier within the time limits set by that courier for next-day delivery. 27. CONTRACTS Each Party shall, at all times, be responsible or its Authorized Work obligations, and acts and omissions of Contractors, subcontra-tors and persons directly or indirectly employed by such Party for services in connection with the Authorized Work. Each Party shall require its Contractors to be bound by terms and conditions which are the same or similar to those contained in this Agreement, as the same may be applicable to Contractors. 28. RELATIONSHIP OF THE PARTIES The Parties shall act in an independent capacity and not as officers or employees or agents of each other. This Agreement is not intended to and does not form any "partnership" within the meaning of the California Uniform Partnership Act of 1994 or otherwise. 29. NON-DISCRIMINATION C USE No Party shall unlawfully discriminate, harass, or allow harassment against any employee or applicant for employment because of sex, race, color, ancestry, religious creed, national origin, physical disability (including HIV and AIDS), mental disability, medical condition (cancer), age (over 40), marital status, and denial of family care leave. Each Party shall ensure that the evaluation and treatment of its employees and applicants for employment are free frbm such discrimination and harassment, and shall comply with the provisions of the Fair,'Employment and Housing Act (Government Code Section 12990 (a)- (f) et seq.) and the applicable regulations promulgated thereunder (California Code of Regulations, Title 2, Section 7285 et seq.). The applicable regulations of the Fair 2010-12 Orange C,`unty Cities Partnership Program Agreement 20 Employment and Housing Commission implementing Government Code Section 1 990 (a)- (0, set forth in Chapter 5 of Division 4 of Title 2 of the California Code of Regul tions, are incorporated into this Agreement by reference and made a part hereof as if set rth in full. Each Party represents and warrants that it shall include the substance of the nondiscrimination and compliance provisions of this clause in all subcontracts for its Authorized Work obligations. 30. COMMISSION/UTILITY AUTHORITY TO MODIFY OR TERMINATE This Agreement and the Programs shall at all times be subject to the discretion of the Commission, including, but not limited to, review and modifications, excusing a Party's performance hereunder, or termination as the Commission may direct from time to time in the reasonable exercise of its jurisdiction. In addition, in the event that any ruling, decision or other action by the Commission adversely impacts the Programs, the Utility shall have the right to terminate this Agreement in accordance with/the provisions of Section 25 above by providing at least ten (10) days' prior written notice to the Cities setting forth the effective date of such termination. Notwithstanding the right to terminate, as partners in the Programs, the Parties agree to share in the responsibility and to abide by Commission energy policy supporting this Program. The Parties agree to use all reasonable efforts to minimize the adverse impact to a Party resulting from such Commission actions, including but not limited to modification of the required energy savings goals set forth in Section 4.2 which are fundamental to this Agreement. 31. NON-WAIVER None of the provisions of this Agreement shall be considered waived by either Party unless such waiver is specifically stated in writing. 32. ASSIGNMENT No Party shall assign this Agreement or any part or interest thereof, without the prior written consent of the other Party and any assignment without such consent shall be void and of no effect. Notwithstanding the foregoing, if a Utility is requested or required by the Commission to assign its rights/and/or delegate its duties hereunder, in whole or in part, such assignment or delegation/shall not require the Cities' consent, and such Utility shall be released from all obligations hereunder arising after the effective date of such assignment, both as principal and as surety. 33. FORCE MAJEURE Failure of a Party ,to perform its obligations under this Agreement by reason of any of the following shall not constitute an event of default or breach of this Agreement: strikes, picket lines, boycoot efforts, earthquakes, fires, floods, war (whether or not declared), revolution, riots, insurrections, acts of God, acts of government (including, without limitation, any agency or department of the United States of America), acts of terrorism, acts of the public enemy, scarcity or rationing of gasoline or other fuel or vital products, 2010-12 Orange County Cities Partnership Program Agreement 21 inability to obtain materials or labor, or other causes which are reasonably eyond the control of such Party. 34. SEVERABILITY In the event that any of the terms, covenants or conditions of this/Agreement, or the application of any such term, covenant or condition, shall be held invalid as to any person or circumstance by any court, regulatory agency, or other regulatory body having jurisdiction, all other terms, covenants, or conditions of this/Agreement and their application shall not be affected thereby, but shall remain in fulyforce and effect, unless a court, regulatory agency, or other regulatory body holds that the provisions are not separable from all other provisions of this Agreement. 35. GOVERNING LAW; VENUE This Agreement shall be interpreted, governed, and construed under the laws of the State of California as if executed and to be performedwholly within the State of California. Any action brought to enforce or interpret this Agreement shall be filed in Los Angeles County, California. In the event of litigation in a US. District Court, exclusive venue shall lie in the Central District of California. 36. SECTION HEADINGS Section headings appearing in this Agreement are for convenience only and shall not be construed as interpretations of text. 37. SURVIVAL Notwithstanding completion or termination of this Agreement, the Parties shall continue to be bound by the provisions of this Agreement which by their nature survive such completion or termination Such provisions shall include, but are not limited to, Sections 9, 10, 13, 14, 15, 18, 22, 35 and 38 of this Agreement. 38. ATTORNEYS' FEES Except as otherwise provided herein, in the event of any legal action or other proceeding between the Parties arising out of this Agreement or the transactions contemplated herein, each Party in such legal action or proceeding shall bear its own costs and expenses incur r-d therein, including reasonable attorneys' fees. 39. COOPERATION Each Party,grees to cooperate with the other Party in whatever manner is reasonably required to facilitate the successful completion of this Agreement. 40. ENTIRE AGREEMENT t 22 2010-12 Orange County Cities Partnership Program Agreement This Agreement (including all of the Exhibits and Attachments he2reement which are incorporated into this Agreement by this reference) contains the entire and understanding between the Parties and merges and supersedes all prior agreements, representations and discussions pertaining to the subject matter of this Agreement. 41. COUNTERPARTS. This Agreement may be executed in one or more counterparts,,each of which shall be deemed to be an original, but all of which together shall be deeme o be one and the same instrument. [INTENTIONALLY LEFT BLANK] F r 2010-12 Orange County Cities Partnership Program Agreement 23 SIGNATURE PAGE IN WITNESS WHEREOF, the Parties hereto. have caused this Agreement to b executed by their duly authorized representatives. The Cities: CITY OF COSTA MESA Name: Allan Mansor Name: Allan Roeder Title: Mayor Title: City Manager Date: Date CITY OF HUNTINGTON BEACH Name: Cathy Green Name: Fred Wilson Title: Mayor of Huntington Beach Title: City Administrator Date: Date: APPROVED AS TO FORM JENNIFER McG TH,City Attorney t' By 9 Deputy City Attorney 2010-12 Orange County Cities Partnership Program Agreement 24 CITY OF WESTMINSTER Name: Donald Lamm Title: City Manager Date: SCG: SOUTHERN CALIFORNIA GAS COMPANY By: Mark Gaines Title: Director, Customer Programs Date: r f 2010-12 Orange County Cities Partnership Program Agreement 25 EXHIBIT A PROGRAM IMPLEMENTATION PLANS 1) Program Name and Program ID number Program Name: Orange County Cities Partnership Program ID Number: TBD 2) Projected Program Budget Table Table 11 j Integration Totals Total Mar etmg` Budget Total Budget By Y TOTAL Llrreo Admmistratrve ts<putreacb Allocated to Program lmpleman�atton Cost`(Actual) (Act al` Other Programs (Actual) A_e � 4 S \ (if Applicable) Program# Main Program Name/Sub-Programs Market Sector Programs" ." ... =Core Program,#1 Sub-Program#1" / Sub-Program#2 Etc. TOTAL:I These budget numbers are presented in Appendix C: Energy Division Tables,Graphs Pie Charts: Table 7.1 -2009 -2011 IOU Strategic Planning Program Budget 3) Projected Program Gross Impacts able Table 2 2009 _20141 2009 Three'-Year EE Pro ram gram Three= arEfo ram g Three-Year EE Pro g Program# Program Name I Sub Programs Gross kWh Savings . " Gross kW'Savmgs ""' ssT erm Sauing ' Market SectorrPrograrr s Mar, ,-�.. � - � �— .... ,..�. �x�•.! Core Program#1? � F Sub14Pro ram#1 a .r s Definition of Table 1 Column Headings:Total Budget is the sum of all other columns presented here Total Administrative Cost includes all Managerial and Clerical Labor, Human Resource Support and Development,Travel and Conference Fees,and General6d Administrative Overhead(labor and materials). Total Direct Implementation—includes all financial incentives used to promote participation in a program and the cost of all direct labor,installation and service�labor,hardware and materials,and rebate processing and inspection used to promote participation in a program. r Total Marketing&Outreachr'includes all media buy costs and labor associated with marketing production. Integrated Budget Allocated to Other Programs includes budget utilized to coordinate with other EE, DR,or DG programs. Total Budget is the sum of all other columns presented here Definition of Sub-Program:A"sub-program"of a program has a specific title;targets; budget;uses a unique delivery or marketing approach not used across the entire program; and for resource programs, has specific estimated savings and demand impacts. 2010-12 Orange County Cities Partnership Program Agreement 26 Mr,, Sub-Program#2 Etc. A WIF TOTAL: �4. g ' These budget numbers are presented in Appendix C: Energy Division Tables,Graphs Pie/harts: Table 7.1 -2009-2011 IOU Strategic Planning Program Budget 4) Program Element Description and Implementation Plan a) List of program elements: Program elements are described below. b) Overview: Core Program Element A-Government Facilities A.I.Retrofit of county and municipal facilities The four cities in the Orange County Partnership are developing detailed lists of facilities that will be retrofitted during the three-year program. Many of these facilities and their respective energy savings have been identified and quantified. Other buildings have been audited by the CEC, andethe Partnership is awaiting the CEC's reports. Municipal facilities energy efficiency is a big component of Huntington Beach's local government partnership. It will consist of numerous projects in 2 phases. Phase 1 consists of Monitoring Based Commissioning of the 2 largest municipal facilities in the City and IT energy saving retrofits such as server virtualization,network energy management software and HVAC retrofits of serer rooms. Phase 2 energy projects will consist of lighting system redesign&retrofits,HVAC retrofits, Pumping retrofits,boiler retrofits, domestic hot water,and building envelope improvements. A.2.Retro-commissioning(of buildings and clusters of buildings) If The cities are including this means of achieving significant energy savings in their plans. See A.1 above. A.3.Integrating Demand Response into the audits SCG will help promote participation in demand response programs. Each city plans to increase its participation in demand response accordingly. Integrated EE/DR audits will be conducted in eligible facilities. A.4.Technical Assistance for project management,training,audits,etc.- Each partnership has a specific budget for each of these activities. A.5).On-Bill Financing Each city in the partnership has indicated a keen interest in using On-bill financing(OBF). The extent of participation in OBF will be Dated only by the according to OBF guidelines approved by the CPUC. Core Program Element B- Str tegic Plan Support 13.1 Code Compliance Support The Partnership will support the individual cities as they examine ways to increase compliance with existing codes. Each partner is aware that this is an area where increased enforcement can result in substantial energy savings and greenhouse gas emissions.The partnership will provide training,technical assistance and additional support from SCE's,and SCG's Codes and Starndards program to help build capacity in local government to address code compliance issues. B.2). Reach Code/ t� 27 2010-12 Orange County Cities Partnership Program Agreement f The cities in this Partnership are also interested in establishing meaningful reach codes as part of its effort secure long term energy savings and greenhouse gas emissions in support of the CLTEESP. The Partners will consider what other cities have done and will benefit from process,templates and other best practices. See Table 6 for more details. B.3).Guiding Document(s)Support At least one of the cities offers information at the city's building permit office on best practices and energy efficiency opportunities through the utility's programs. Significant enhancements to this practice are planned for the 2009—2011 program cycle. The Partnership intends to make available training,documents and templates to help cities develop their climate and energy action plans,especially as it relates to utility nergy elements . B.5) Financing for the community The Partners are aware of the opportunities for financing provided by AB 811 and will be examining its possibilities. The Partnership will provide AB811 presentation and technical assistance through the Peer-to-peer support network. B.5) Peer to Peer Support a IOUs intend to develop an effective means by which each city participatingAn partnerships,past and present, can readily share information with others. Conference calls including all Partnerships as well as conferences will be conducted on a routine basis. Core Program Element C-Core Program Coordination C1).Outreach and Education The partnership has a portion of its budget specifically allocated to outreach and education to demonstrate local government leadership and to provide the community with opportunities to provide energy actions and reduce the community's environmental footprint. ME&O activities,gwill consist of staff training,Huntington Beach Green Corp citizen&Environmental Board training, SCE=s Mobile Education Unit at the Annual Green Expo, Stipends for HB Green Corp home and business energy&green audits&onsite retrofits, Support for Huntington Beach's annual environmental awards, publishing of Huntington Beach's case studies and strategic sustainability and energy plans and potentially impler tinting an AB 811 financing mechanism for citizens of Huntington Beach. C.2) Residential and Small Business Direct Install There are no activities planned for direct install in homes and business at this time. However, outreach will be done in the communication to create awareness of energy services and programs as mentioned in C.1. C.3.)Third-party program coordination's The Partnership will execute community events appropriate for a third party contractor to execute, such as light exchange events. CA) Retrofits for just-above LIEE qualified customers Only coordination activities contemplated. ,r C.5 Technical Assistance for program management,training,audits,etc. a specific portion of the partnership budget is allocated specifically for this activity. See Table 6 for more details. G Ar c) Non-Incentive Services:/ • Train Huntington Beach Green Corps of citizen volunteers to provide energy efficiency audits for residential, smallkommercial and low-income citizens of Huntington Beach,provide stipends to offset background checks and expenses. • Study&consider voluntary"reach"green codes,similar to the HB Goes Green Residential Scorecard that is currently in a pilot project mode. • Support for the annual Environmental Award �r 2010-12 Orange County Cities Partnership Program Agreement 28 • Publishing case studies and sustainability and energy/climate plans with support from available programs and funding sources. • Strategic plan support. The city of Costa Mesa would like to extend its existing green building permit waiver program. d) Target audience • All Municipal Facilities: City Halls,Civic Center, Police Departments,Libraries, Sol al Services, Community Centers, Sports Fields,Medical Facilities, Parks, and water infrastructure. • Additionally,citizens and businesses and city staff are the target audience for partner cities. e) Implementation The program will be cost-effectively implemented with customized incentives for the retro-commissioning and retrofitting of partner cities' municipal facilities based on SCG enhanced incentives for LGPs. 5) Program Element Rationale and Expected Outcome a) Quantitative Baseline and Market Transformation Information Table 3 Baseline Metric Metric A Metric B Metric C Program/Element Refer to the overarching PIP section b) Market Transformation Information Table 4 Market Transformation Planning Estimates Program/Element 2009 2010 2011 Metric A Metric B Metric C Etc. Refer to the overarching PIP section c) Program Design to Overcome Bar,'riers In this Partnership,the barriers and strategies to overcome them are the traditional resource barriers of expertise and funding as outlid in the Master PIP. d) Quantitative Program Objectives: Table 5 1� �p J' f 2010-12 Orange County Cities Partnership Program Agreement 29 Program Program Program Target by Target by Target by Target Program Element 2009 2010 2011 1 Natural Gas Savings Gross Therm 40,000 80,000/ 120,000 2 Number of Workshops TBD TBD/ TBD 3 Number of Ordinances, Codes, etc. TBD TBD TBD 4 #of ME&O Events conducted that target Residential TBD TBD TBD customers 6) Other Program Element Attributes a) Best Practices Same as outlined in the Master PIP. b) Innovation Demonstrate environmental stewardship and community leadershipsupport of the CLTEESP by developing a municipal sustainability dashboard to simplify sustainability reporting including energy efficiency and renewable energy. c) Interagency Coordination Huntington Beach is a PIER program partner and is planning on installing Bi-level area lights and Enforma diagnostic software. Huntington Beach has a materials�ecovery facility in its jurisdiction,and will be partnering to develop a RESCO grant proposal for thePCEC utilizing indigenous renewable energy resources in Huntington Beach. The partnership willl�provide technical assistance and other support though the Codes and Standards program and its relationship with PIER as well as facilitate support from other programs and organizations through its network o�f`consultants, engaged for this purpose. d) Integrated/coordinated Demand Side Mana eg ment� : Orange County cities will pursue necessary&'jcost-effective DSM as identified in the SCE's Energy Leader Master PIP and have identified at least 5 accounts that are eligible for participation in Dermand'Response programs. The partnerships will facilitatethe provision of technical support for renewable energy-related activities being planned by the City of Huntington Beach and other cities wishing to pursue similar opportunities. Hungtington Beach willapply for a RESCO grant from the CEC and Federal government to utilize indigenous renewable energies,, . e) Integration across resource types(energy,water, air quality, etc) Part of the Phase 2 energy projects identified earlier will include smart irrigation controllers for the 'd irrigation accounts that use significant amounts of water. . f) Pilots PIER program Bi-level LED area lighting and Enforma diagnostic software in the City of Huntington Beach is currently o New city buildings,Chamber of Commerce and Police Building,will be LEED Certified in Costa Mesa. g) EM&V The utilities are proposing to work with the Energy Division to develop and submit a comprehensive EM&V Plan for 2009-2011 after the program implementation plans are filed.This will include process evaluations and other program-specific studies within the context of broader utility and Energy Division studies. More detailed plans for process evaluation and other program-specific evaluation efforts cannot be developed untih�after the final program design is approved by the CPUC and in many cases after program 2010-12 Orange County Cities Partnership Program Agreement 30 implementation has begun,since plans need to be based on identified program design and implementation issues 7) Partnership Program Advancement of Strategic Plan Goals and Objectives Table 6 1-1: Develop,adopt and implement model building energy codes(and/or other green codes)more stringent than Title 24's requirements,on both a mandatory and voluntary basis;adopt one or two additional tiers of increasing stringency. 1-2: Establish expedited permitting and entitlement Costa Mesa will consider expedited permitting approval processes,fee structures and other based upon reduced valuation in 2009. incentives for green buildings and other above-code developments. 1-3: Develop,adopt and implement model point-of- sale and other point-of transactions relying on building ratings. 1-4: Create assessment districts or other Huntington Beach will investigate the adoption of mechanisms so property owners can fund EE an AB 811 fina ncing mechanism for its jurisdiction through city bonds and pay off on property taxes; develop other EE financing tools. 1-5: Develop broad education program and peer-to- peer support to local govt's to adopt and implement model reach codes 1-6:Link emission reductions from"reach" codes and programs to ARB's AB 32 program 2-2: Dramatically improve compliance with and enforcement of Title 24 building code, and of HVAC permitting and inspection requirements (including focus on peak load reductions in inland areas). 2-3: Local inspectors and contractors hired/ Huntington Beach already has two energy service by local governments shall meet the companies pre-qualified and they are energy literate and conscious firms.Additionally,Costa Mesa has a requirements of the energy component of service agreement with a certified energy company their professional licensing (as such energy that is also energy literate components are adopted). 1 3-1: Adopt specific goals for efficiency of Huntington Beach will be publishing an local government buildings, including: environmentally preferred purchasing policy and publishing energy/climate plans as part of the 2009- 2011 Partnership with SCE. Additionally,Costa Mesa is also interested in publishing an energy action plan in partnership. 3-2: Require commissioningif or new Phase 1 energy projects are retro-commissioning the buildings, and re-commissidnm and retro- two largest municipal facilities with significant near commissioning of existingibuil�ings. term energy savings. The City of Costa Mesa has a high interest in retro-commissioning all its current municipal facilities to maximize both energy savings and performance. 3-4: Explore creation o line item in LG Huntington Beach has devoted a portion of its budgets or other options that allow EE cost annual capital improvement plan to energy savings to be returned to the department efficiency and the savings accrue to the general and/or projects thatyprovided the savings to fund. However,part of the energy/climate action fund additional efficiency. 2010-12 Orange County Cities Partnership Program Agreement 31 plan will track the fiscal impacts(savings)created by the plan. I� 3-5: Develop innovation Incubator that competitively selects initiatives for inclusion in LG pilot projects. 4-1: LGs commit to clean energy c imate Both the City of Costa Mesa and Huntington Beach change leadership. have located appropriate sites for large scale solar installations and both cities are exploring current funding mechanisms. Huntington¢Beach is also applying for grants to study ocean&urban wind power and will meet 2020 AB�32 goals before 2015. HB has signed the US Mayor's Climate Protection Agreement. y. http://www.usmayors.org/climateprotection/ 4-2: Use loca governments' general pan Huntington Beach has deferred investment in energy and other elements to promote general plan updates tonclude energy/climate energy efficiency, sustainability and concerns climate change. ` 4-4: Develop oca projects that integrate Phase 2 energy projects will include water efficiency EE/DSM/water/wastewater end use projects, including aerators and ET irrigation controllers. Additionally,as wastewater,stormwater f and potable water capital projects are pursued this partnership�,.with SCE,and SCG will ensure that they are as energy efficient as possible. 4-5: Deve op EE-re ate "carrots" and Huntington Beach is studying zoning and "sticks" using local zoning and develop"ment authority changes to comply with development authority AB32%SB375. Specifically we are updating the Beach/Edinger Corridor plans and the Downtown Specific plan to create accessible and walkable neighborhoods that enhance Huntington Beach. J i 4� ,y r 2010-12 Orange County Cities Partnership Program Agreement 32 EXHIBIT B 2010-12 ORANGE COUNTY CITIES PARTNERSHIP PROD/RAM GOALS AND BUDGET 2010-2012 Energy Savin s Gross Therm) 2010 2011 2012 3-year Total SCG 40,000 Therm 40,000 Therm 40,000 Therm 126 000 Therm Other non-resource goals are contained in the SCG PIP in Exhibit A ` 2010-12 Orange County Cities Partnership Budget Orange County Cities Partnership Total Non-Incentive Budget $402,465 SCG Incentive From SCG Core Programs �. $120,000 r �l SCG Authorized Budget SCG Administrative Other 1. $105,083 SCG Administrative Overhead $44,927 Total Utility Authorized Budget $150,010 �f Orange County Cities Authorized Budget $252,455 2010-12 Total Non-incentive Program Budget $402,465 Projected Allocations for Oran a County Cities Authorized Budget: $252,455 2010 2011 2012 Administratiod Strategic Plan Support $12,000 $12,000 $12,000 Marketing & Outreach $12,150 $12,155 $12,150 Direct Implementation $60,000 $60,000 $60,000 Incentive 40,000 $40,000 $40,000 (1) Incentive i,sa part of SCG Core Program's Incentive Budget. The incentive level is $1.00 per thermTor calculated measures. Incentives for deemed measures are in accordance with the incentive levels for the applicable SCG Core Programs. 2010-12 Orange County Cities Partnership Program Agreement 33 EXHIBIT C EM&V PLAN [TO BE ATTACHED WHEN ISSUED BY THE COMMISSION] e r j. i k'r (1 .4 5� P f� t 2010-12 Orange County Cities Partnership Program Agreement 34 EXHIBIT D REPORTING REQUIREMENTS 1.Reporting 1.1 Cities shall provide each respective Utility with the requisite information, in accordance with the Agreement, on the prior month's activities, accomplishments and expenditures related to its respective Authorized Work or Approved Project obligations, for purposes of preparing the Monthly, Quarterly and Annual Reports. f 1.2 Each Utility shall provide Cities in accordance with the provisions of the Agreement, a copy of its filed Monthly Report within five(5) Business Days after filing. YI d 2. Quarterly Report j a% i 2.1 Portfolio Benefit/Cost Metries(Cumulative to Date) a. Total cost to billpayers(TRC, administrative cost and incremental cost per the Standard Practice Manual) b. Total savings to billpayers(TRC) c. Net benefits to billpayers(TRC) i' d. TRC Ratio e. PAC Ratio f. Cost per kWh saved (cents/kWh') (PAC) g. Cost per therm savings(Vthrerm)(PAC) Y 2.2 Measure List—A spreadsheet table for each program or program elementz containing each measure installed, service rendered, or measure/service committed during the report month for which the Program intends to claim savings. Cities should include any new measures as part of the quarterly report. The list should(display each measure as it is tracked and recorded by Cities, and should include the following parameters at a minimum: a. Name of Measure or Service Rendered b. Measure or Service Description C. Customer name and applicable Utility account number d. Installation site address e. Affected square footage f. Applicable NAICS code g. DEER Measure ID (where applicable) h. DEER Run ID(where applicable) i. Unit Definition j. Unit gross kWh savings k Unit gross Therms savings 1 Unit gross kW demand reduction m. Incremental Measure Cost y�n. Net to Gross Ratio Identification of distinct programs and program elements may be determined by CPUC staff at a later time. 2010-12 Orange County Cities Partnership Program Agreement 35 o. Effective Useful Life p. Detailed end use classification (using classification scheme in section 6) q. Quantity Installed during report period r. Quantity Committed during report period s. Rebate amount paid t. Market Sector classification(using classification scheme in section 6) u. Market Segment classification(using classification scheme in section 6) . 2.3 Expenditures for the program per cost reporting format below fiction 7 below contains list of allowable costs) h. Commission Authorized Budget i. Operating Budget j. Total Expenditures i. Administrative Cost ii. Marketing/Advertising/Outreach Costs iii. Direct Implementation 2.4 GBI Report—Progress towards achieving als of the Green Building Initiative, if applicable(Cumulative results) a. Estimate of expenditures on program act' ities that contribute towards GBI goals (including both public and non-public mmercial participants) b. Net cumulative achieved kW, kWh a Therm savings contributing towards GBI goals. c. Net achieved kW, kWh and Therm vings contributing towards GBI goals for the quarter. d. A description of non-resource pr gram activities that support the Green Building Initiative, including marketing nd outreach activities. e. Estimate of square footage of ected by program activities supporting the Green Building Initiative f. Items b, c and e above Ycde ggregated by: i. 2-digit NAICSii. Aggregated ene classification (using classification scheme in section 5) 2.5 Program Narrativ s—For the program, a description of the program activities occurring during the quarter. k. Administrative tivities 1. Marketing acti ities in. Direct Implementation activities n. Implementer's assessment of program performance and program status (is the program on target, e�ceeding expectations, or falling short of expectations, etc.) o. For non--esource programs and program elements(programs or program elements that are note aiming direct energy impacts),a discussion of the status of program achievements. p. Discussion of changes in program emphasis (new program elements, less or more emphasis on a particular delivery strategy, program elements discontinued,measure discontinued, etc.) q. Discussion of near term plans for program over the coming months(e.g., marketing and outreach efforts that are expected to significantly increase program participation, etc.) r. Changes to staffing and staff responsibilities, if any 36 s. Changes to contacts, if any t. Changes to subcontractors and subcontractor responsibilities, if any u. Number of customer complaints received v. Program Theory and Logic Model if not already provided in the p ogram's implementation plan, or if revisions have been made. 2.6 Quarterly Reports—Each Utility shall provide CITIES a copy of its filed Quarterly Report within five (5)Business Days after filing with the Commission in accordance with the Agreement. 3. Annual Reports / The format and content of the annual report is expected to be develdped by the CPUC in 2010. CITIES will be required to fulfill these reporting obligations for their program. 4. Reporting Terminology Definitions Adopted Program Budget—The program budget as it is adopted by the Commission. Inclusive of costs (+/-)recovered from other sources. Operating Program Budget—The program budget as it is defined by the program administrators for internal program budgeting and management purposes Inclusive of costs (+/-)recovered from other sources. Jf Direct Implementation Expenditures—Costs associated with activities that are a direct interface with the customer or program participant or recipient(e.g., contractor receiving training). (Note: This is still an open issue, the items included in this definition may be changed by the CPUC pending discussion on the application of the State's Standard Practice Manual.) Report Month—The month for which a p4rticular monthly report is providing data and information. For example,the report month for a report covering the month of July 2010, but prepared and delivered later than July 2010, would be July 201,0. Program Strategy—The method deployed by a program in order to obtain program participation. Program Element—A subsection of a program, or body of program activities within which a single program strategy is employed. (Example: A body of program activities employing both an upstream rebate approach and a direct/icn nstall approach is not a single program element.) 5. Measure Classific , 77 Measure End-Use Classification Each energy efficiency measure reported should be classified into one of the following end-use categories Residential End Uses Detailed End Use/ Aggregated End Use Clothes Dryer Appliances 37 Clothes Washer Appliances Consumer Electronics Consumer Electronics Cooking Cooking Appliances , Dishwasher Appliances Other Appliance Appliances Building Shell HVAC Space Cooling HVAC Space Heating HVAC Interior Lighting Lighting Exterior Lighting Lighting Pool Pump Pool Pump Freezers Refrigeration Refrigeration Refrigeration Water Heating Water Heating Other(User Entered Text String Description) Other Nonresidential End Uses Detailed End Use Aggregated End Use Building Shell HVAC Space Cooling HVAC Space Heating HVAC Ventilation HVAC Daylighting Lighting. Interior Lighting Lighting Exterior Lighting Lighting Office Equipment Office Compressed Air Process Cooking process Food Processing Process Motors Process Process Cooling Process Process Heat Process Process Steam Process Pumps Process Refrigeration Refrigeration Other(User Entered Text String Description) Other Measure Market Sector/Ma Iket Segment Classification Where reports require market sector or market segment classification,the following classification scheme should be used. Market Sector Market Segment Residential NA Single Family NA Multi Family NA Mobile Homes NA Nonresidential NAICS CODE(greater than 2 digit not required) I 38 Commercial NAICS CODE(greater than 2 digit not required) Industrial NAICS CODE(greater than 2 digit not required) Agricultural NAICS CODE(greater than 2 digit not required) Unknown NA 6. Allowable Costs Allowable Costs Table The cost items listed on the Allowable Costs sheet are the only costs that can bed Iaimed for ratepayer- funded energy efficiency work. The costs reported should be only for costs actually expended. Any financial commitments are to be categorized as commitments. If the reporting'entity does not have a cost as listed on the cost reporting sheet,then no cost is to be reported for that item. These Allowable Cost elements are to be used whenever costs are invoiced or reported to the program administrator. If there is a desire to include additional Allowable Cost elements,the program administrator should be contacted in order for the administrator to seek a proval from the CPUC. 3/30/2006 Cost Categories Allowable Costs Administrative Cost Category Managerial and Clerical L/abor IOU Labor-Clerical IOU Labor-Program Design IOU Labor-Program Development IOU Labor- Pro raePlanning IOU Labor- Program/Project Management IOU Labor- Staff/Management IOU Labor- Staff Supervision Subcontractor/Labor-Clerical Subcontractor Labor-Program Design Subcontractor Labor- Program Development Subcontractor Labor- Program Planning Subcontfactor Labor-Program/Project Management Subcontractor Labor- Staff Management Subcontractor Labor- Staff Supervision Human Resource Support and Development IOU Labor-Human Resources ,I'OU Labor- Staff Development and Training /IOU Benefits -Administrative Labor IOU Benefits-Direct Implementation Labor IOU Benefits- Marketing/Advertising/Outreach Labor IOU Payroll Tax-Administrative Labor IOU Payroll Tax-Administrative Labor IOU Payroll Tax-Administrative Labor IOU Pension-Administrative Labor IOU Pension - Direct Implementation Labor IOU Pension -Marketing/Advertising/Outreach Labor Subcontractor Labor-Human Resources Subcontractor Labor- Staff Development and Training Subcontractor Benefits - Administrative Labor Subcontractor Benefits-Direct Implementation Labor 39 Allowable Costs Table The cost items listed on the Allowable Costs sheet are the only costs that can be claimed for ratepayer- funded energy efficiency work. The costs reported should be only for costs actually expended. Any financial commitments are to be categorized as commitments. If the reporting entity/does not have a cost as listed on the cost reporting sheet,then no cost is to be reported for that item. These Allowable Cost elements are to be used whenever costs are invoiced or reported to the program administrator. If there is a desire to include additional Allowable Cost elements, the program administrator should be contacted in order for the administrator to seek a proval from the CPUC. 3/30/2006 Cost Categories Allowable Costs Subcontractor Benefits-Marketin' Advertising/Outreach Labor Subcontractor Payroll Tax-Administrative Labor Subcontractor Payroll Tax-Direct Implementation Labor Subcontractor Payroll Tax- Marketing/Advertising/Outreach Labor Subcontractor Pension-Administrative Labor Subcontractor Pension -Direct Implementation Labor Subcontractor Pension-jMarketin Advertisin Outreach Labor Travel and Conference Fees IOU Conference Fees IOU Labor-Conference Attendance IOU Travel -Airfare IOU Travel - LVd in IOU Travel - Meals IOU Travel/Mileage IOU Trave'f - Parkin IOU Travel - Per Diem for Misc. Expenses Subcontractor- Conference Fees Subcontractor Labor- Conference Attendance Subcontractor-Travel -Airfare Subcontractor-Travel -Lodging ,Subcontractor-Travel -Meals (Subcontractor- Travel - Mileage Subcontractor-Travel -Parking Subcontractor-Travel -Per Diem for Misc. Expenses Overhead General and Administrative)-Labor and Materials IOU Equipment Communications IOU Equipment Computing IOU Equipment Document Reproduction IOU Equipment General Office IOU Equipment Transportation IOU Food Service ' IOU Office Supplies " IOU Postage f IOU Labor-Accounting Support / IOU Labor-Accounts Payable r IOU Labor- Accounts Receivable IOU Labor- Administrative IOU Labor-Facilities Maintenance 40 Allowable Costs Table The cost items listed on the Allowable Costs sheet are the only costs that can be claimed for r tepayer- funded energy efficiency work. The costs reported should be only for costs actually expended. Any financial commitments are to be categorized as commitments. If the reporting entity does ot have a cost as listed on the cost reporting sheet,then no cost is to be reported for that item. These Ylowable Cost elements are to be used whenever costs are invoiced or reported to the program administrator. If there is a desire to include additional Allowable Cost elements,the program administrator should be contacted in order for the administrator to seek a proval from the CPUC. f f° 3/30/2006 Cost Categories Allowable Costs IOU Labor-Materials Management IOU Labor- Procurement / IOU Labor- Shop Services f IOU Labor- Transportation Services IOU Labor-Automated Systems IOU Labor-Communications IOU Labor- Information,,Technology IOU Labor- Telecommunications Subcontractor E ui rn�ent Communications Subcontractor E ui ment Computing Subcontractor E ui ment Document Re roduction Subcontractor Equipment General Office Subcontractork- ui ment Transportation Subcontractor Food Service Subcontractor Office Supplies Subcontractor Postage Subcontractor Labor- Accounting Support Subcontractor Labor-Accounts Payable Subcontractor Labor-Accounts Receivable Subcontractor Labor-Facilities Maintenance Subcontractor Labor- Materials Management Subcontractor Labor- Procurement Subcontractor Labor- Shop Services Subcontractor Labor-Administrative Subcontractor Labor-Transportation Services Subcontractor Labor-Automated Systems Subcontractor Labor-Communications Subcontractor Labor- Information Technology Subcontractor Labor-Telecommunications Marketin /r.tdvertisin /outreach Cost Category IOU-Advertisements/Media Promotions IOU -Bill Inserts IOU - Brochures IOU - Door Hangers IOU -Print Advertisements IOU - Radio Spots IOU - Television Spots / IOU - Website Development i 41 Allowable Costs Table The cost items listed on the Allowable Costs sheet are the only costs that can be claimed fop'ratepayer- funded energy efficiency work. The costs reported should be only for costs actually expended. Any financial commitments are to be categorized as commitments. If the reporting entity does not have a cost as listed on the cost reporting sheet, then no cost is to be reported for that item. These/Allowable Cost elements are to be used whenever costs are invoiced or reported to the program administrator. If there is a desire to include additional Allowable Cost elements,the program administrator should be contacted in order for the administrator to seek a proval from the CPUC. / / 3/30/2006 Cost Categories Allowable Costs IOU Labor- Marketing0 IOU Labor-Media Production IOU Labor-Business Outreach IOU Labor- Customer Outreach" IOU Labor-Customer Relations Subcontractor-Bill Inserts, Subcontractor- Brochures" Subcontractor-Door Hangers Subcontractor-Print Advertisements Subcontractor-Radio Spots Subcontractor-Television Spots Subcontractor-Website Development Subcontractor Yabor- Marketing Subcontractor Labor-Media Production Subcontractor Labor-Business Outreach Subcontrdctor Labor-Customer Outreach Subcontractor Labor-Customer Relations Direct Implementation Cost Category f Financial Incentives to Customers Activity-Direct Labor IOU Labor-Curriculum Develo ment /IOU Labor-Customer Education and Training IOU Labor- Customer Equipment Testing and Dia nosties IOU Labor- Facilities Audits Subcontractor Labor-Facilities Audits Subcontractor Labor- Curriculum Development Subcontractor Labor- Customer Education and Training Subcontractor Labor- Customer Equipment Testing and Diagnostics Installation and Service-Labor IOU Labor-Customer Equipment Repair and Servicin IOU Labor- Measure Installation Subcontractor Labor-Customer Equipment Repair and Servicing Subcontractor Labor-Customer Equipment Repair and Servicing Direct Implementation hardware and Materials IOU Audit Applications and Forms IOU Direct Implementation Literature IOU Education Materials IOU Energy Measurement Tools 1 42 Allowable Costs Table The cost items listed on the Allowable Costs sheet are the only costs that can be claimed for ratepayer- funded energy efficiency work. The costs reported should be only for costs actuallYexpended. Any financial commitments are to be categorized as commitments. If the reporting entity does not have a cost as listed on the cost reporting sheet,then no cost is to be reported for that item. These Allowable Cost elements are to be used whenever costs are invoiced or reported to the program administrator. If there is a desire to include additional Allowable Cost elements,the program administrator should be contacted in order for the administrator to seek a proval from the CPUC. ; 3/30/2006 Cost Categories Allowable Costs IOU Installation Hardware r Subcontractor-Direct Im lementation Literature Subcontractor-Education Materials Subcontractor-Energy Measurement Tools Subcontractor-Installation Hardware Subcontractor-Audit Applications and Forms Rebate Processing.,afnd Inspection -Labor and Materials IOU Labor-Field_/Verification IOU Labor- Site Ins ections IOU Labor- Rebate Processing IOU Rebate�A' pplications Subcontractor Labor-Field Verification Subcontractor Labor-Rebate Processing Subcontractor-Rebate Applications j 43