Draft proposal for initiating the Regional Technical Forum
Related links: Regional
Technical Forum website
July 27, 1998 | document 98-18
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the paper.]
Dear Interested Parties:
The Council is requesting public comment on the attached issue paper
that sets forth a draft proposal for establishing the Regional Technical
Forum (RTF). In 1996
Congress directed the Bonneville Power Administration (Bonneville) and
the Northwest Power Planning Council (Council) to convene a Regional Technical
Forum (RTF) to develop standardized protocols for verifying and evaluating
conservation savings.
The Comprehensive Review of the Northwest Energy System (Comprehensive
Review) supported the Congressional directives and recommended that the
RTF should, in addition, track conservation and renewable resource goals
and provide feedback and suggestions for improving the effectiveness of
conservation and renewable resource development programs in the region.
The Comprehensive Review also recommended that the RTF conduct periodic
reviews of the region's progress toward meeting its conservation and renewable
resource goals at least every five years and communicate recommended changes
to appropriate decision-makers. These periodic reviews are to acknowledge
changes in the market and adjust targets appropriately.
The Council is particularly interested in comments on the following
issues:
- Are the functions that Congress and the Comprehensive Review directed
the RTF to perform needed? Are some functions more important than others?
- How should the RTF be organized to carry out these functions? How could
the recommendations for organization be improved?
- What level of funding is appropriate to support the operation of the
RTF?
- How should the RTF be funded?
- How should the RTF interact with existing entities, such as utilities,
local and state utility regulatory and governing bodies, state energy agencies,
the Northwest Energy Efficiency Alliance and the Northwest Power Planning
Council?
The Council is requesting comments on the options outlined in Issue
Paper 98-18 by close of business August 21, 1998. The Council will be also
be accepting public comments on this document at its August 11th - 12th
meeting in Portland. Please address all comments to Mark Walker, Director
Public Affairs, Northwest Power Planning Council, 851 SW Sixth Avenue,
Suite 1100, Portland, OR 97204, and indicate you are commenting on Council
publication 98-18.
Sincerely,
Stephen Crow
Executive Director
Draft proposal for initiating the Regional Technical
Forum
INTRODUCTION
In 1995, the Bonneville Power Administration (Bonneville) began to shift
responsibility for financing and acquiring conservation savings over to its
utility customers. This shift in responsibility was intended to reduce
Bonneville's costs and permit utilities to better tailor their programs to local
situations. Congress recognized that one implication of this shift would likely
be a more diversified approach to conservation acquisition across the region.
Consequently, in 1996 it directed Bonneville and the Northwest Power Planning
Council (Council) to convene a Regional Technical Forum (RTF) to develop
standardized protocols for verifying and evaluating conservation savings. This
is necessary because the historical program costs and savings may not be
applicable to radically redesigned conservation programs. Congress further
recommended that the RTF's membership include individuals with technical
expertise in conservation program planning, implementation, and evaluation and
that its services be made available to all utilities in the Northwest.
The Comprehensive Review of the Northwest Energy System (Comprehensive
Review) supported the Congressional directives and recommended that the RTF
should, in addition, track conservation and renewable resource goals and provide
feedback and suggestions for improving the effectiveness of conservation and
renewable resource development programs in the region. The Comprehensive Review
also recommended that the RTF conduct periodic reviews of the region's progress
toward meeting its conservation and renewable resource goals at least every five
years and communicate recommended changes to appropriate decision-makers. These
periodic reviews are to acknowledge changes in the market and adjust target
appropriately.
The Comprehensive Review's recommendations were based on its perception that
the region needed to track conservation activities and renewable resource
development systematically to assess whether public purpose goals are being
achieved. The Comprehensive Review also stated that the uniform standards for
verification and evaluation will become increasingly important as consumers gain
access to energy service markets where utilities and new market entrants can
expect to compete for "public purpose' funds to meet consumer demands for
energy services.
In April 1997, the Council and Bonneville convened a meeting to discuss the
formation of the RTF. Participants in the meeting represented public and private
utilities, public interest groups, state regulatory agencies and state and local
government. Attendees generally supported the formation of the RTF and requested
that the Council prepare a draft proposal to serve as the basis for further
discussions.
This draft proposal is meant to stimulate discussion on how the RTF should be
organized and operated to achieve the goals that both Congress and the
Comprehensive Review set forth. It addresses four questions that must be
resolved to implement the RTF:
- What are the goals of the RTF?
- How should the RTF be structured and who should be included in its
membership?
- Who will sponsor/fund the RTF?
- What is the RTF's scope of work with respect to:
- Protocols for Verification and Evaluation,
- Progress; and,
- Feedback and Suggestions?
PROPOSED GOALS OF THE REGIONAL TECHNICAL FORUM
The goals of the RTF should be consistent with the charge given to it by the
Congress and the Comprehensive Review. These are to
- Develop standardized protocols for verification and evaluation of energy
savings.
- Track regional progress toward the achievement of the region's
conservation and renewable resource goals.
- Provide feedback and suggestions for improving the effectiveness of the
conservation and renewable resource development programs and activities in
the region.
- Conduct periodic reviews of the region's progress toward meeting its
conservation and renewable resource goals at least every 5 years,
acknowledging changes in the market for energy services and the potential
availability of cost-effective conservation opportunities.
Implicit in the second and fourth bullets is the need for development of
regional goals taking into account estimates of cost-effectiveness.
PROPOSED STRUCTURE AND MEMBERSHIP
Congress and the Comprehensive Review indicated that the RTF should represent
a broad spectrum of interest and have members with technical expertise and
experience. However, neither Congress nor the Comprehensive review addressed the
issue of how the actual work of the RTF would be carried out, nor who would
convene the meetings. This section proposes potential approaches to addressing
these issues.
Draft Proposal - The Council proposes that it carry out the functions
enumerated for the RTF by the Congress and Comprehensive Review with the
assistance of a standing advisory committee. Under this proposal the Council
would be responsible and accountable for the policies and conclusions related to
the RTF. However, to ensure broader technical and policy input, the Council
would be established an "RTF" as one of its standing advisory
committees to provide peer review and advice to the Council as it carries out
these functions. Members of the RTF would be selected by the Council based on
expertise and experience from a list of nominees provided by stakeholders.
Membership would consist of individuals drawn from utilities, the private
sector, Bonneville, public interest, state and local government, academic and
national laboratory personnel. State regulatory commissioners or their staffs
would be asked to serve as ex officio members. Members would be reimbursed for
their travel expenses, and may be compensated for their time depending upon the
level effort required to carry out their duties.
This option is being proposed because it relies on existing infrastructure
and expertise. The Council and its staff have carried out most of the functions
envisioned for the RTF by both the Senate and the Comprehensive Review for the
last 15 years. For example, since 1991 the Council has prepared an annual
assessment of regional utility conservation achievements. It has prepared and
distributed case studies of successful conservation programs, including several
recent ones that describe how utilities in the region are using conservation and
renewable resources to successfully respond to competitive pressures. It has
developed an extensive database on conservation program evaluations. The Council
also prepares a regional assessment of cost-effective conservation and renewable
resources at least every five years and has the responsibility for communicating
its findings to regional decision-makers and the general public.
The Council is also accountable to the governors in the region, whereas a
committee of the Council or an independent entity is not. This "public
accountability" will be increasingly important when the efficiency and
effectiveness of public purpose investments are being assessed.
From a logistical standpoint, the Northwest Power Planning and Conservation
Act authorizes the Council to form advisory committees to aid it in the conduct
of its duties. The Council has used such committees extensively. For example,
the Council used a Conservation Resources Advisory Committee and the Economics
and Forecasting Advisory Committee to assist it in the development of prior
plans. The Council also has established public involvement procedure and notice
processes.
There are at least two other options for structuring the RTF:
Option 1 - Under this option the RTF would be an
"independent" committee, supported by the Council. This committee
would function similarly to the Council's Independent Economics Advisory Board
and the Independent Scientific Advisory Board to provide peer review and advice
on investments in fish and wildlife protection, mitigation and enhancement. The
RTF would be established as one of the Council's standing advisory committees.
This would permit it to have access to the Council's technical staff and public
involvement and administrative support. Members would be selected by the Council
for a list of nominees provided by "stakeholders" based on expertise
and experience. Members would be drawn from the private sector, utilities,
public interest, and academic and national laboratory personnel. State
regulatory commissioners or their staffs would be asked to serve as ex officio
members. Members would be reimbursed for their travel expenses, but not their
time.
Option 2 - Under this option the RTF would be established as an
independent entity, perhaps as a private, non-profit organization. This
committee might function similarly to the Northwest Energy Efficiency Alliance.
It would have a its own governing board and independent staff. It would be
operated with funding from the region's private utilities and Bonneville.
Membership on the RTF board while self-selected would need to be consistent with
Congressional and Review recommendations.
SPONSORSHIP/FUNDING
Some level of financial support will be needed to carry out the functions of
the RTF. Neither the Congress nor the Comprehensive Review's recommendations
indicated how the work of the RTF was to be funded. This section offers possible
proposals for financial support of the RTF.
Draft Proposal - Support RTF activities from the Council's budget and
potential future contributions from funds collected in each state to support
"public purposes." This approach to funding the RTF's functions
appears to be appropriate because it distributes the cost of supporting the RTF
across the region and is more likely to provide an adequate and sustainable
funding base. However, it does rely on the ability of the Council to support the
RTF within its budget in the near term with potential funding from other sources
in the future. Due to anticipated constraints on the Council's future budget,
this may impact the scope of work that the RTF can effectively carry out or have
an on impact other Council activities.
Other options for funding are described below.
Option 1 - Rely on volunteers to carry out the functions of the RTF.
This option is implied by the use of the word "voluntary" in both the
Congressional and Comprehensive Review recommendations. However, the functions
that the RTF is charged to carry out by the Comprehensive Review appear to
require an ongoing commitment of resources for a period of at least 10 years. It
seems unlikely that a group of volunteers would be either willing or able to
undertake the scope of work envisioned for the RTF and sustain these activities
over such a prolonged period.
Option 2 - Support RTF activities from the Council's budget,
supplemented by fee revenues. This also does not appear to be a viable option
because it is not clear that supporting the RTF through charging fees for
service is either likely or perhaps even appropriate. For example, the RTF could
assess whether an energy service provider's claims for energy savings are based
on the correct application of a standardized evaluation protocol. At least in
the near term, it is not apparent who might be willing to pay for such
"services." Additionally, services that could be charged for by the
RTF might more appropriately be provided by the private sector or as part of
normal state regulatory oversight.
SCOPE OF WORK
As directed by the Congress and the Comprehensive Review, the RTF has three
major ongoing tasks. These are to:
- Establish standardized protocols for verification and evaluation of energy
savings,
- Track regional progress towards the achievement of conservation and renewable
resource goals; and,
- Provide feedback and suggestions for improving the effectiveness of the
conservation and renewable resource development programs and activities in the
region.
While on the surface these tasks seem rather straightforward, neither the
Congress nor the Comprehensive Review provided detailed guidance as to the
specific work scope the RTF should pursue and the time frame for that work. How
the RTF decides to fulfill these tasks directly impacts the level of resources
(budget and personnel) required to support it. Listed below are some draft
proposals for the scope of work and level of effort that the RTF might undertake
to fulfill its charter.
Protocols
The Comprehensive Review recommended that participation in the RTF should be
voluntary. However, the recommendation from Congress and the Comprehensive
Review that charges the RTF with the development of standardized protocols for
verification and evaluation of energy savings seems to imply that programs that
are funded by "public purpose" sources should be evaluated in
accordance with accepted standards. Evaluation involves more than documenting
that the public purpose funds were spent in accordance with standard accounting
principles. Evaluations are not audits; they are critical assessments of whether
the program's objectives were achieved.
Draft Proposal - The RTF should collect, review and distribute
existing protocols, and develop and promulgate new methods in response to new
information and/or new approaches to achieving conservation savings. These
verification and evaluation protocols would be distributed via the Internet and
mail, and through RTF sponsored seminars for practitioners. Upon request, the
RTF would review whether the appropriate verification and/or evaluation
protocols had been applied correctly.
This level of effort appears appropriate because it would allow the region to
leverage resources for the purpose of standardizing verification and evaluation
protocols and to evolve these protocols as circumstance change. It also has the
potential for establishing consistent application of protocols across the
region. It should be noted that regardless of the level of resources committed
to the development and dissemination of standardized protocols, activities
underwritten by "public purpose" funding should be subject to
independent evaluation.
The estimated budget required to implement this option is approximately
$100,000 in the initial year and $50,000 annually thereafter.
Two alternative levels of commitment to ensure that public purpose funds are
being effectively used are described below.
Option 1 - More Limited Level of Effort. Under this option the RTF
would simply collect, review and make available for use existing verification
and evaluation protocols that it believes represent "best practice."
Distribution of these protocols would be limited to an Internet web site and
surface mail. While RTF would not develop new protocols, it could review
approaches that are developed by others to assess their applicability and
appropriateness. This option might be a viable alternative to the draft
proposal, provided that other parties invested the resources needed to keep
evaluation and verification protocols up to date. The estimated budget required
to implement this option is approximately $75,000 in the initial year and
$25,000 annually thereafter.
Option 2- Expanded Level of Effort. Under this option the RTF would
collect, review and distribute existing protocols, develop and promulgate new
methods in response to new information and/or new approaches to achieving
conservation savings. Distribution of the verification and evaluation protocols
would be via the Internet and surface mail, and through RTF sponsored seminars
for practitioners. The RTF would also conduct randomly selected reviews of
whether the appropriate verification and evaluations protocols had been applied
correctly and whether the results where supportable. The level of commitment
needed to support this option is significantly greater than the other two
alternatives because it requires an assessment of whether the results are of a
particular evaluation are justified. It also places the RTF in a much more
direct oversight role.
The estimated budget required to implement this option is approximately
$100,000 in the initial year and $125,000 annually thereafter
Tracking
Since 1991 the Council has systematically tracked the conservation resource
development in the region through an annual survey of the region's utilities and
Bonneville. This survey collects detailed information on utility conservation
programs and expenditures. The Council also attempts to estimate the magnitude
of the conservation savings that have been produced by changes in state energy
codes and federal efficiency standards. Historically, electric utility and
Bonneville programs and changes in state and federal efficiency codes and
standards have dominated the region's conservation development efforts.
Therefore, the Council has not accounted for conservation savings generated
outside of utility programs by individual consumer actions or by government
programs (e.g., the Oregon State Business and Energy Tax Credit, the Federal
Energy Management Program (FEMP)).
The Comprehensive Review recommended that the RTF track progress towards the
region's conservation and renewable resource goals. The Comprehensive Review
also recommended that the RTF conduct periodic reviews of the region's progress
(at least every five years). To assure that the RTF would have access to the
data needed to track progress the Comprehensive Review recommended that all
retail electricity distribution utilities and state and local low-income
weatherization service providers adopt and publish an annual report of their
conservation and low-income weatherization achievements. This report is to
identify at least the amount of conservation achieved by economic sector (e.g.,
residential, commercial, etc.), the number of dwellings occupied by low-income
households that were weatherized and the level of utility investments in these
areas. No reporting requirements were recommended for renewable resource
development.
There are two fundamental policy questions that must be addressed before the
specific "tracking" scope of work can be designed. The first question
is "What are the region's conservation and renewable resource goals?"
The second question flows from the first. It is "What conservation and
renewable resource developments counts toward these goals?" For example, do
only resources developed using "public purpose" funds count? Do
resources developed using state or federal tax-credits count? Do consumer funded
investments count?
Draft Proposal - Historically, the Council, under the responsibilities
given it in the Northwest Power Act, has established the level of conservation
that is cost-effective to develop in the region, as well as establish
quantitative goals for renewable (and other) resources. Under this option, the
Council would continue to set these goals with the advice of RTF. The Council,
in co-operation with the states, might also prepare an assessment of the need
for low-income weatherization.
The RTF, again working as an advisory committee to the Council, would develop
standardized forms and data definitions for use by retail electricity
distribution utilities, state and local low-income weatherization service
providers and renewable resource developers. Utilities, low-income
weatherization service providers and developers would be asked to report their
activities on these forms and in accordance with the definitions on an annual
schedule. The RTF would compile the data submitted and publish an annual
regional summary. It would also present this summary report to the Council.
This summary would compare the level of activity and expenditures reported
with the Comprehensive Reviews "public purpose" goals. This report
would describe actual expenditures were to the Review's recommended allocations
of the three percent of retail revenues to local and regional conservation,
low-income weatherization and renewable resources. In addition, the RTF would to
assess whether all the cost-effective electric efficiency opportunities
identified by the Council are being captured, whether low-income consumers are
being adequately, affordably and fairly served and whether new renewable
resources are being developed in the region. That is, the RTF report would track
both the amount of money spent and the results (e.g., savings, number of homes
weatherized, etc.) achieved. These comparisons would include both quantitative
and qualitative measures of progress.
The RTF would not attempt to assess the level of conservation being developed
by private market activities (i.e., without the use of "public
purposes" funding.) The RTF would rely on the oversight of the state
regulatory authorities and local public utility governing bodies to verify the
accuracy of the data submitted by utilities and resource developers.
Systematically tracking of both the levels of expenditures and results is
required to address the question of whether the region's public purpose goals
are being achieved. If the data collection process is either incomplete or
inaccurate, the region's citizens and policy makers will not be able to
meaningfully evaluate the effectiveness of the expenditures. Without a
consistent data collection process and an in-depth analysis of the impact, the
sole metric by which the region measures progress will be limited to whether
"the money was spent as prescribed." As a result, it will be
impossible to assess whether additional cost-effective conservation
opportunities are being missed or, conversely, whether lower funding levels can
accomplish the region's conservation goals.
The estimated budget required to implement this option is approximately
$125,000 in the initial year and $100,000 annually thereafter.
Two other options, described below, assume that the Comprehensive Reviews
recommendation to allocate 3 percent of retail electricity sales revenues for
conservation, low-income weatherization and renewables represent the region's
goals
Option 1 - More Limited Level of Effort. Under this option the Council
would continue to establish the level of regionally cost-effective conservation
to be developed and renewable resource development goals. However, rather than
develop a "standardized" tracking system, the RTF would annually
request a copy of the annual reports published by each retail electricity
distribution utility and state and local low-income weatherization service
provider. It would use these reports to prepare a regional summary of
conservation and low-income weatherization savings and expenditures. The RTF
would also survey energy resource developers and suppliers to ascertain the
level and type of renewable resource development activity in the region. The RTF
would not attempt to assess the level of conservation being developed by private
market activities (i.e., without the use of "public purposes"
funding). The RTF would rely on the oversight of the state regulatory
authorities and local public utility governing bodies to verify the accuracy of
the data submitted by utilities and resource developers. The RTF would compile
the data submitted and publish an annual regional summary. It would also present
this summary report to the Council. The estimated budget required to implement
this option is approximately $75,000 in the initial year and $50,000 annually
thereafter.
Option 2 - Moderate Level of Effort. Under this option the RTF would
develop standardized forms and data definitions for use by retail electricity
distribution utilities, state and local low-income weatherization service
providers and renewable resource developers. Utilities, service providers and
developers would be asked to report their activities on these forms and in
accordance with the definitions to the RTF on an annual schedule. The RTF would
compile the data submitted and publish an annual regional summary. It would also
present this summary report to the Council.
This summary would compare the level of activity and expenditures reported
with the Comprehensive Review's "public purpose" goals. That is, it
would report how closely actual expenditures were to the Review's recommended
allocations of the 3 percent of retail revenues to local and regional
conservation, low-income weatherization and renewable resources. If standardized
measurement and evaluation protocols are used, then it will also be possible to
compare these results (e.g., savings, number of low-income homes weatherized)
with regional conservation, renewable resource and low-income weatherization
goals. As in Option 1, the RTF would not attempt to assess the level of
conservation being developed by private market activities (i.e., without the use
of "public purposes" funding). Also, as in Option 1, the RTF would
rely on the oversight of the state regulatory authorities and local public
utility governing bodies to verify the accuracy of the data submitted by
utilities and resource developers.
The estimated budget required to implement this option is approximately
$100,000 in the initial year and $50,000 annually thereafter.
Provide Feedback and Suggestions
The Comprehensive Review charged the RTF with providing feedback and
suggestions for improving the effectiveness of conservation and renewable
resource programs. In order to carry out this task the RTF will require
information on the relative effectiveness of alternative approaches to
accomplishing conservation and renewable resources goals. This implies that the
RTF will have access to evaluations of conservation and renewable resource
development programs funded by "public purpose" monies. It also
assumes that these public purpose funded programs will be evaluated in
accordance with accepted protocols. (See Recommendation under
"Protocols.")
Draft Proposal - During the transition to a competitive electric
service market it is anticipated that approaches to developing conservation and
renewable resources will evolve rapidly. Under this option, the RTF would
prepare an annual report that profiled a limited number successful ("best
of class") conservation and renewable resource development programs and
activities. It would make these profiles available to interested parties both in
print and via electronic media. The RTF would also provide peer review services
on new program designs or major program re-designs. These peer review services
would be provided only "on request." RTF members who serve on the peer
review panels might be reimbursed if such reviews require substantial time
commitments. All recommendations from these reviews would publicly available.
The RTF would also take a proactive role to promote effective programs and
approaches. For example, it could establish a mechanism for publicly recognizing
exemplary conservation and renewable resource development programs. This might
include such activities as conducting competitions, with participants selected
on a random basis or via self-nomination. In addition, the RTF would provide its
findings and recommendations to local utility governing bodies and/or state
regulatory agencies regarding program effectiveness and potential for
improvement. In this role, the RTF might serve as a "regional"
clearinghouse on successful program design and implementation. The estimated
budget required to implement this option is approximately $75,000 to $100,00
annually, including compensation for RTF members who participate in peer
reviews.
Option 1 - More Limited Level of Effort. Under this option, the RTF
would only prepare an annual report that profiled a limited number successful
("best of class") conservation and renewable resource development
programs and activities. It would make these profiles available to interested
parties both in print and via electronic media.
The estimated budget required to implement this option is approximately
$50,000 annually.
Option 2 - Moderate Level of Effort. Under this option, in addition to
preparing and distributing the profiles described in Option 1, the RTF would
provide peer review services on new program designs or major program re-designs.
These peer review services would be provided only "on request." RTF
members who serve on the peer review panels might be reimbursed if such reviews
require substantial time commitments. All recommendations from these reviews
would be publicly available.
The estimated budget required to implement this option is approximately
$100,000 to $150,000 annually, including compensation for RTF members who
participate in peer reviews.
Request for Comments The Council is requesting comments on the options
outlined above by close of business August 21, 1998. The Council will be also be
accepting public comments on this document at its August 11th - 12th meeting in
Portland. Please address all comments to Mark Walker, Director Public Affairs,
Northwest Power Planning Council, 851 SW Sixth Avenue, Suite 1100, Portland, OR
97204.
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