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Home My WebLink AboutContracts & Agreements_168-2013_CCv0001.pdf AGREEMENT TO DELIVER THE 2013-2014 SOCALGAS/CITY OF REDLANDS ENERGY EFFICIENCY PARTNERSHIP PROGRAM BETWEEN CITY OF REDLANDS AND SOUTHERN CALIFORNIA GAS COMPANY DATED: SEPTEMBER 3,2013 This program is funded by California utility ratepayers and administered by the Utility under the auspices of the California Public Utilities Commission. THIS AGREEMENT TO DELIVER THE 2013-2014 SOCALGAS/CITY OF REDLANDS ENERGY EFFICIENCY PARTNERSHIP PROGRAM (the "Agreement") between the City of Redlands, (the "City"), and Southern California Gas Company ("SCG"), shall be effective as of September 3, 2013 ("Effective Date "). SCG and the City may be referred to herein individually as a "Party" and collectively as "Parties". The SOCALGAS/CITY OF REDLANDS ENERGY EFFICIENCY PARTNERSHIP may be referred to herein as the"Redlands Partnership"or the"Program." WHEREAS On November 8, 2012, the California Public Utilities Commission (the "Commission"), issued its Decision Approving 2013-2014 Energy Efficiency Programs and Budgets(D. 12-11-015, the"Decision"). The Decision approves a portfolio of energy efficiency programs and budgets to be implemented in 2013-2014, including the expansion of SCG Local Government Partnership Programs, which includes the Redlands Partnership; WHEREAS, the City and the Utility have expressed a commitment to participate jointly in the Program, allowing the city to achieve immediate and long-term energy savings in its own facilities and to demonstrate energy efficiency leadership in its communities while helping residents and businesses achieve sustainable reductions in energy use within SCG territory; and 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 Programs 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. Authorized Partnership Budget: The Commission-approved maximum budget for funding the Partnership and performance by the Program Participants' of Authorized Work, the total amount which shall be apportioned among the Program Participants, including the City, by SCG in its sole and absolute discretion(see"Partner Budget"). 2013-14 City of RedlandsSouthem California Gas Co Partnership Agreement 1 \ca\d. MAgreementsSouthern CA(ins Co Energy Efficiency Partnership Program Agmt 2013-14doe 1.3. 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 attached hereto as Exhibit A, and as agreed to be performed by the Parties. 1.4. Business Day: The period from one midnight to the following midnight, excluding Saturdays, Sundays, and holidays. 1.5. 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. 1.6. 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. 1.7. Customers or Eligible Customers: Customers eligible for 2013-2014 Program services, which are SCG customers located within SCG service territory in the City, and may include the county itself. 1.8. EM&V: Evaluation, Measurement and Verification of the Program pursuant to Commission requirements. 1.9. Energy Efficiency Measure (or Measure): As used in the Commission's Energy Efficiency Policy Manual, Version 4, July 2008, as may be supplemented or updated from time to time. 1.10. 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. 1.11. The City: The participating city in this Program is Redlands. 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. Energy Champion: The City's representative who is a point of contact for the Program and who can represent the City on a daily basis for all Program activities and energy efficiency projects pertaining to the City. 1.14. Program Management Consultant: A third-party contractor hired by SCG on behalf of the Partnership to facilitate and coordinate the delivery of the Program. The activities of the Program Management Consultant include, but not limited to, coordinating and facilitating Partnership meetings and events, program reporting, assistance in marketing and outreach, assistance in tracking Program progress, coordinating Program information, etc. 2013-14 City of Redlands.Southern California Gas Co Partnership Agreement 1\ca\djrn\Agreanents1Southern CA Gas Co Energy Efficiency Partnership Program Agrnt 2013-14 doc 1.15. Partner's Budget: That portion of the Authorized Budget, which excludes the Utility's costs, and represents the maximum budget and maximum allocation by period for funding the performance of the Program by the City or Program Participants and as set forth in Exhibit B, subject to amendment by the Utility consistent with the terms of this Agreement. 1.16. Program Expenditures: Actual (i.e., no mark-up for profit, administrative or other indirect costs), reasonable expenditures of the City or Program Participants that are pre- approved, directly identifiable to, and required for the Authorized Work. 1.17. PIP or Program Implementation Plan: The implementation plan specific to this Partnership, together with SCG Local Government Master PIPs, which include the anticipated scope of the Programs in SCG service territory, as approved by the Commission and attached hereto as Exhibit A. 1.18. Planning Document: A Program document that describes Program implementation and/or management processes, procedures and strategies, as may be supplemented or updated from time to time. 2. PURPOSE The 2013-2014 Program is 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 the terms and conditions under which the Parties will jointly implement the 2013-2014 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 2013-2014 SCG Local Government Partnerships are designed to provide integrated technical and financial assistance to help local governments effectively lead their communities to increase energy efficiency, reduce greenhouse gas emissions, protect air quality and ensure that their communities are more livable and sustainable. The Program provides performance-based opportunities for the City to demonstrate energy efficiency leadership in its communities through energy saving actions, including retrofitting its municipal facilities, as well as providing opportunities for constituents to take action in their homes and businesses. By implementing measures in its own facilities, the City will lead by example as the City and the Utility work together to increase community awareness of energy efficiency and position the City as leaders in energy management practices. The Program will provide marketing, outreach,education, training and community sweeps to connect the communities with opportunities to save energy, money and help the environment. The Program Participants will leverage the strengths of each other to efficiently deliver energy and demand savings. This partnership will allow the City to deliver sustainable energy savin , promote energy 2013-14 City of Redlands.Southern California Gas Co Partnership Agreement 3 \ca\clim\Agreements\Southern CA Gas Co Energy Efficiency Partnership Program Agmt 201 3-14doe efficient lifestyles, and develop an enduring leadership role for the City through its relationships with other Program Participants, its constituents, and the Utility. 4. AUTHORIZED WORK 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 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. 4.2. Objectives. The Program is designed to meet the specific energy savings targets set forth in Exhibit B of this Agreement, while implementing the Program strategies and meeting the general objectives and milestones set forth in the PIPs. 5. LIMITATION ON SERVICE TERRITORY The Parties agree that Authorized Work shall only be performed in the SCG service territory and must directly benefit SCG customers, with natural gas savings applicable solely to SCG's utility system. No Authorized Work shall be performed for any customers that receive natural gas from a municipal utility corporation, or other gas service provider,that do not directly receive gas service from SCG. Nothing in this Section 5 is intended to preclude Program coordination with other municipal utility. 6. OBLIGATIONS OF THE PARTIES 6.1. Obligations of the Utility and the City 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 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 the Utility. 6.1.3. To the extent practicable and with coordination by the Utility,the Parties shall use the Programs as a portal for all existing or selected energy program offerings of the Utility, including, but not limited to, programs targeting low-income customers, self-generation, solar, emerging technologies, and other programs as described in the PIP, and in support of the Strategic Plan adopted by the Commission and the Utility. This coordinated effort supports the 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. 2013-14 City of Redlands.Southern California Gas Co Partnership Agreement 4 lAcaVdirMAgreements\Southern CA Gas Co Energy Efficiency Partnership Program Agin 2013-14 doc 6.1.4. Consistent with those contained in the PH), the Utility and the City may work together to identify, develop, and accomplish additional mutually agreeable goals in accordance with Section 7. 6.2. Obligations of the City. 6.2.1. The City will appoint an "Energy Champion" who will be the primary contact between the City and the SCG 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 ten Business Days following execution of this Agreement. The City shall communicate regularly with the SCG Energy Efficiency Representative in accordance with Section 7.3 and 7.4 hereof, and shall advise SCG immediately of any problems or delays associated with its Authorized Work obligations. 6.2.2. The City will be actively involved in all aspects of the Program. The City will use its best efforts to (a) dedicate human resources necessary to implement the Program successfully, (b)provide support for the Program's marketing and outreach activities, and (c) work to enhance communications with SCG to address consumer needs. 6.2.3. The City 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 6.2.4. 6.2.4. The City acknowledges and agrees that the Program has other Program Participants, and that no one Program Participant is entitled to the entire Authorized Partnership Budget, and that the City shall work with SCG and each other Program Participants to achieve the goals and accomplish the Authorized Work of the Program. 6.2.5. The City shall perform its Authorized Work obligations within the City's 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. 6.2.6. The City shall obtain the approval of the Utility prior to distribution, publication, circulation, or dissemination of such materials in any way to the public. In addition, all advertising, marketing or otherwise printed or reproduced material used to implement, refer to or is in anyway related to the Program must contain the respective name and logo of the Utility 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." 2013-14 City of Redlands.Southern California Gas Co Partnership Agreement 5 I:\ca\djm\AgrernentsSoutheui CA Gas Co Energy Efficiency Partnership Program Agmt 201 3-14doe 6.2.7. Upon reasonable request by the Utility, the City shall submit to the Utility all contracts, agreements or other requested documents with the City's Contractors (including subcontractors) performing work for the Program. 6.3. Obligations of the Utility. 6.3.1. The Utility will appoint a Partnership representative ("SCG Energy Efficiency Representative") who will be the primary contact for the City and Program Participants, and who will be authorized to act on behalf of the Utility in carrying out the Utility's obligations under this Agreement. Such appointment shall be communicated in writing to the City within ten Business Days following execution of this Agreement. 6.3.2. The Utility will oversee the activities and implementation of the Program, in accordance with this Agreement. 6.3.3. The Utility will be actively involved in all aspects of the Program. The Utility will use its best efforts to add value to the Program by (a) dedicating human resources necessary to assist the City in implementing the Program successfully and providing and maintaining a Utility presence in the City, (b) providing support for the Program's marketing and outreach activities, and (c) working closely with the City to enhance conununications with Program Participants, address customer needs and provide the Utility information and services. 6.3.4. The Utility shall provide, at no cost to the City, informational and educational materials on the Utility's statewide and local energy efficiency core programs. 6.3.5. The Utility shall work with the City as requested to help identify cost-effective energy efficient projects in each of the Program Participant's qualifying municipal facilities within the Utility's service territory. 6.3.6. SCG shall administer the Gas Surcharge funds authorized by the Commission for the Program in accordance with this Agreement, and SCG may hire a Program Management Consultant on behalf of the Partnership to help facilitate and coordinate the delivery of the Program. 6.3.7. The Utility shall be responsible for coordinating and ensuring compliance with all Utility reporting and other Utility filing requirements by the PUC. 6.3.8. The Utility shall be responsible for tracking performance of the City in accordance with Section 10.1.2, and for verifying all energy savings claims, and for monitoring and verifying achievement of the general objectives, goals, and milestones as described in Exhibit A. 6.4. EM&V. Once the Commission has approved and issued an evaluation, measurement and verification ("EM&V") plan for the 2013-2014 Program, such EM&V plan shall be attached to this Agreement as Exhibit C and shall be incorporated herein by this 2013-14 City of Redlands.Southern California Gas Co Partnership Agreement 6 Fkca\dim\AgreementskSouthem CA Gas Co Energy Efficiency Partnership Program Agmt 2013-14doc reference. Any subsequent changes or modifications to such EM&V plan by the Commission shall be automatically incorporated into Exhibit C. The City shall provide and comply with all Commission requests regarding activities related to EM&V. The City and its Contractors shall cooperate fully with the Utility's Representative(s) and will provide all requested information, if any, to assure the timely completion of all EM&V tasks requiring the City's involvement or cooperation. 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 all Parties: 7.1.1.1.Any material modification to the Authorized Work in connection with the Program. 7.1.1.2.Any action that materially impacts the agreed-upon schedule for implementing the Program. 7.1.1.3.Selection of any Contractor not previously approved by the Utility if applicable. 7.2. Document Retention. 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. 7.3. Regular Meetings. During the term of this Agreement, the City representatives of the Partnership identified in writing pursuant to Section 6.2.1 and 6.3.1, respectively, 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 City's 2013-2014 Program performance, deliverables, schedules and budget, toward achievement of the goals set forth in the PIP (Exhibit A), and the Partnership's progress towards meeting overall Partnership goals set forth in Exhibit C. Any decision- making shall be reached and documented in accordance with the requirements of Section 7.1 above. 7.4. Regular Communication. Regular communication among Partnership representatives is critical for the long-term success of the Partnership and achievement of Partnership goals and objectives. Notwithstanding Section 7.3, above, the Partnership representatives identified in writing by each Partner pursuant to Sections 6.2.1 and 6.3.1, respectively, including other Program Participants, 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- 2013-14 City of Redlands.Southern California Gas Co Partnership Agreement 7 1 kca VijmAgreernerits‘Southern CA Gas Co Energy Efficiency Partnership Program Agmi 2013-14 doc making during this communication process shall be reached and documented in accordance with the requirements of Section 7.1 above. 7.5. 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 City 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 City 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 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 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. 8.2. 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. The City represents and warrants that it has not received (and that its Contractor(s) 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 Utility program or from any other Utility, state or local program. 8.4. 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 The Parties shall implement those reporting requirements set forth in Exhibit D 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 2013-2014 Program, in which case and at which time such Commission-approved reporting requirements shall replace the requirements set forth in Exhibit D in their entirety. 2013-14 City of Redlands.Southern California Gas Co Partnership Agreement 8 Lkca!djm\Agreements‘Southern CA Gas Co Energy Efficiency Partnership Program Agmt 2013-14.cloc 10. PAYMENTS 10.1. Partner's Budget 10.1.1. Maximum Budget: The Partner Budget is set forth in Exhibit B to this Agreement and represents maximum share of the Program's two-year Authorized Partnership Budget for funding the performance of the Program by the City or Program Participants. Additionally, Exhibit B sets forth the maximum non-incentive budget on a periodic basis during the Program. The City shall not be entitled to compensation in excess of the Partner's 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 Partners' Budgets set forth in Exhibit B may be reallocated or adjusted at any time by the Utility at its sole discretion,based upon the Utility's evaluation of the City's commitment to, and progress toward the Program energy savings target, other general objectives, goals, and milestones set forth herein. 10.1.2.Tracking: The Utility will track Program Expenditures against the objectives set forth in Section 4.2 hereof, including tracking (or estimating) achievement towards the specific energy savings targets set forth in Exhibit B, and will provide such tracking information to the City on a regular basis, but in no event less than quarterly. The tracking will enable the Utility to: (i) properly monitor and allocate the Authorized Partnership Budget among all Utility Local Government Partnerships according to their individual performance and achievement of respective goals and objectives, (ii) confirm or amend the Partner's Budget, set forth in Exhibit B hereto,based on Program's performance of the goals and objectives set forth in this Agreement; 10.1.3. Partner's 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 City's agreement to help achieve 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 set forth in Section 10.1.2 above, that the City is not performing in accordance with the goals and objectives set forth in this Agreement, then the Utility shall have the unilateral right to reduce, eliminate, or otherwise adjust the Partner's Budget for the remaining Program year or years (other than for Program Expenditures previously committed by the City and approved by the Utility) by amending Exhibit B and providing the amended Exhibit B to the City. Pursuant to this Section, any such amended Exhibit B shall automatically be incorporated into this Agreement and take effect immediately upon delivery from the Utility to the City. 10.1.4. Partner's Budget Categories 10.1.4.1. Non-Incentive Budget: The Partner's Budget is comprised of a non- incentive portion which includes separate categories for Marketing, Education 2013-14 City of Redlands.Southern California Gas Co Partnership Agreement I:\ca\djm\Agreemcnts\Southein CA Gas Co Energy Efficiency Partnership Program Agmt 2013-14 doc & Outreach, Technical Assistance and Direct Implementation, all of which are more fully described in the Program Implementation Plan. 10.1.4.2. Incentive Budget: Incentives will be paid out of SCG's core program budget at the then current rates and terms; however, the Partner will be eligible for incentives from SCG's Calculated Program up to 80% of project costs. 10.2. Program Expenditures. The City, with SCG's prior approval, shall be entitled to spend authorized funds, within the limits of the Partner's Budget on Program Expenditures. The City shall not be entitled to reimbursement of Program Expenditures for any item (i) not specifically identifiable to the Program, (ii) not previously approved by the Utility, (iii) not expended within the term 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 or its representatives shall submit monthly activity reports and expenditure tracking 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 Reports"), by the tenth (10th) Calendar Day of the calendar month following performance, setting forth all Program Expenditures. 10.3.2.The City or its representatives shall submit to the Utility, together with any Monthly Report(s), monthly invoice(s) for reimbursement of reported Program Expenditures, in a format acceptable to the Utility, attaching all documentation reasonably necessary to substantiate the Program Expenditures, including, without limitation, the following: 10.3.2.1. Contractor Costs: Copies of all Contractor invoices. If only a portion of Contractor costs applies to the Program, the City or its representatives shall clearly indicate the line items or percentage of the invoice amount that should be applied to the Program as provided in Exhibit E. 10.3.2.2. Marketing, Education & Outreach: A copy of each distinct marketing material produced, with quantity of a given marketing material produced and the method of distribution. 10.3.2.3. Other expenditures: As pre-approved by the Utility, with sufficient documentation to support the expenditure. 10.3.2.4. 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 in Exhibit E. 2013-14 City of Redlands.Southern California Gas Co Partnership Agreement 10 1:\cakijm\AgneementskSouthem CA Gas Co Energy Efficiency Partnership Program Agmt 2013-14 doc The City and its representatives understand and acknowledge that all of the City's invoices for the 2013-2014 Program and the Monthly Report shall be submitted to the Utility. 10.3.3.The Utility reserves the right to reject the City's invoiced amounts for any of the following reasons: 10.3.3.1. The invoiced amount, when aggregated with previous Program Expenditures, exceeds the amount budgeted therefore in the Partner Budget for such Authorized Work(as set forth in Exhibit B). 10.3.3.2. 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. 10.3.3.3. The invoiced amount, in the Utility'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 City or its representatives 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 City or its representatives shall promptly provide, upon the reasonable request by the Utility, any documentation, records or information in connection with the Program or its Authorized Work. 10.3.5.The Utility shall review and either approve, dispute or reject for payment to the reported Program Expenditures within twenty (20) Calendar Days of receipt of the Monthly Report and corresponding invoice. The Utility 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 Report and corresponding invoice. 10.4. Payment of Incentives. Payment of incentives shall be made in accordance with the applicable SCG program requirements, including terms and conditions, installation data for EM&V process and only after appropriate program documents have been submitted and approved, and the appropriate inspections of each project have been completed to the Utility's satisfaction. 10.5. Shifting Funds. The Utility may shift funds within the Authorized Partnership Budget among Program Participants and/or shift funds within the Partner Budget among budget categories (Marketing, Education & Outreach, Direct Implementation), which categories and budget amounts are set forth in Exhibit B. Such shifting may be made by the Utility to the maximum extent permitted under, and in accordance with, Commission decisions and rulings to which the Program relates. 2013-14 City of Redlands.Southern California Gas Co Partnership Agreement 11 lAcaAm\AgrennentskSouthern CA Gas Co Energy Efficiency Partnership Program Agrra 2013-14 doc 10.6. Reasonableness of Expenditures. The 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 funds paid in the reimbursement of such Program Expenditure, then the 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 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. 12. FINAL INVOICES The City or its representatives must submit final invoices to the Utility no later than March 31, 2015. 13. INDEMNITY 13.1. Indemnity by the City. The City shall indemnify, defend and hold hannless 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 City's negligence or willful misconduct in the City's activities under the Program or performance of its obligations hereunder, or (b) the City's breach of this Agreement or of any representation or warranty of the City contained in this Agreement. 13.2. Indemnity by the Utility. The Utility shall indemnify, defend and hold harmless the City, 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 Utility's negligence or willful misconduct in Utility activities under the Program or performance of its obligations hereunder or (b) the Utility's breach of this Agreement or any representation or warranty of the Utility contained in this Agreement. 13.3. LACTATION 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 2013-14 City of Redlands.Southern California Gas Co Partnership Agreement 12 1 ka\dim\Agreanents\Souihern CA Gas Co Energy Efficiency Partnership Program Agmt 2013-14 doc 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 the Utility, 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 City 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. 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. 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 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. 15.4. Injunctive 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. 2013-14 City of Redlands.Southern California Gas Co Partnership Agreement 13 \ca\cljrMAgrternents\Southern CA Gas Co Energy Efficiency Partnership Program Agmt 2013-14 doc 15.5. Continuing Obligation. 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. 15.6. Failure of Mediation. If, after good faith efforts to mediate a dispute under the terms of this Agreement as provided in Section 15.2 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 35. 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. 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. 16.1.4. 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: 16.1.7.1. Workers' Compensation: statutory minimum. 2013-14 City of Redlands.Southern California Gas Co Partnership Agreement 14 L‘cacljmkAgreements‘.Southern CA Gas Co Energy Efficiency Partnership Program Agmt 2013-14.doc 16.1.7.2. Employer's Liability coverage: $1 million minimum. 16.1.7.3. Commercial General Liability: $2 million minimum per occurrence/$4 million minimum aggregate. 16.1.7.4. Commercial or Business Auto (if applicable): $1 million minimum. 16.1.7.5. 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 Party shall provide evidence that its insurance policies (and the insurance policies of any Contractor, as provided in Section 16.1.7) 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. 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 comparable to the above requirements. 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. 18. CUSTOMER CONFIDENTIALITY REQUIREMENTS 18.1. Non-Disclosure. Subject to any disclosures required pursuant to the Public Records Act, the City, 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 City having obtained the prior written consent of the Utility, except as provided by law, lawful court order or subpoena and provided the City gives the Utility advance written notice of such order or subpoena. 18.2. Confidential Customer Information. "Confidential Customer Information" includes, but is not limited to, a SCG customer's name, address, telephone number, account number and all billing and usage information, as well as any SCG 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. 2013-14 City of Redlands.Southern California Gas Co Partnership Agreement 15 Oca\chrMAgreements\Southern CA Gas Co Energy Efficiency Partnership Program Agmt 2013-1440c 18.3. Non-Disclosure Agreement. Prior to any approved disclosure of Confidential Customer Information, SCG may require the City to enter into a nondisclosure agreement. 18.4. Commission Proceedings. This provision does not prohibit the City 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 City by SCG, and any and all documents and materials containing such Confidential Customer Information or produced by the City 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. 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 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 any Party, the Party whose Confidential Customer Information is implicated in such breach 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 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 termination, payments being withheld, Partner's Budget being reduced or adjusted, funding redirected by the Utility to other programs or partners, or other Program modifications as determined 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; (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 City to the Utility. 2013-14 City of Redlands.Southern California Gas Co Partnership Agreement 16 \ca\dyMAgreernentsSouthem CA Gas Co Energy Efficiency Partnership Program A gmt 2013-14 doc 21. RESTRICTIONS ON MARKETING 21.1. Use of Commission's 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 Utilities Commission." 21.2. Use of the SCG Name. The City must receive prior review and written approval from the Utility for the use of the SCG name, mark or logo on any marketing or other Program materials. The City shall allow five (5) Business Days for the Utility's review and approval. If the City has not received a response from the Utility within the five (5) Business Day period,then it shall be deemed that the Utility has disapproved such use. 21.3. Use of the City's Name. The Utility must receive prior review and written approval from the City for the use of the City's name, marks or logos on any marketing or other Program materials. The Utility shall allow five(5) Business Days for the City's review and approval. If the Utility has not received a response from the City within the five (5)Business Day period, then it shall be deemed that the City has disapproved such use. 22. RIGHT TO AUDIT The Parties agree 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 City 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 Program, safety concerns, fraud or excessive customer complaints, by notifying the City in writing to suspend any Authorized Work being performed in either SCG's service territory. Any performance of Authorized Work by the City in SCG's service territory shall stop immediately, and the City may resume its Authorized Work only upon receiving written notice from the Utility that it may resume its Authorized Work. 2013-14 City of Redlands.Southern California Gas Co Partnership Agreement 17 1:\ca\djm1AgreementsSouthent CA Gas Co Energy Efficiency Partnership Program Agmt 2013-14doc 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, 2015 unless otherwise terminated in accordance with the provisions of Section 25.2 or 30 below. 25.2. Termination for Breach. 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 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 the City or by the Utility 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 City 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 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 the 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 City shall stop any Authorized Work in progress and take action as directed by the 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 Work. 2013-14 City of Redlands.Southem California Gas Co Partnership Agreement 18 lAcakdjmkAgreetnents\Southern CA Gas Co Energy Efficiency Partnership Program Agent 2013-14.doc 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: City of Redlands: SCG: City of Redlands Southern California Gas Company Deborah Allen,Senior Administrative Analyst Becky Estrella, Customer Programs Energy 35 Cajon Street, Suite 222 Programs Supervisor Redlands CA 92373 Local Government& Institutional Partnerships Tel: (909)798-7655 1981 W Lugonia Avenue, SC8013 Email: dallen@eityofredl and s.org Redlands, CA 92374 Tel: (909) 335-7992 Email:Bestrella@semprautilities.com 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; (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. CON IRACTS 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. NON-DISCRIMINATION 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 Party shall ensure that the evaluation and treatment of its employees and applicants for employment are free from such 2013-14 City of Redlands.Southern California Gas Co Partnership Agreement 19 lAcaVijmlAgreernesits1Southern CA Gas Co Energy Efficiency Partnership Program Agmt 2013-14 doc 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, 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 City 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 Parties, and any assignment without such consent shall be void and of no effect. Notwithstanding the foregoing, if either 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 City's consent and the Utility shall be released from all obligations hereunder arising after the effective date of such assignment, both as principal and as surety. 33. FORCE IvIAJEURE 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, 2013-14 City of Redlands.Southern California Gas Co Partnership Agreement 20 l:\cadjrn.AgincntsSouthem CA Gas Co Energy Efficiency Partnership Program Agmt 2013-14sloc 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, 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. 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 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. 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 incurred therein, including reasonable attorneys' fees. 39. COOPERATION Each Party agrees to cooperate with the other Parties in whatever manner is reasonably required to facilitate the successful completion of this Agreement. 2013-14 City of Redlands.Southern California Gas Co Partnership Agreement 21 1 kca'cljm1AgreementskSouthern CA Gas Co Energy Efficiency Partnership Program Agmt 2013-14.doc 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. 2013-14 City of Redlands.Southern California Gas Co Partnership Agreement 22 1.\ca\djm1Agreements\Southern CA Gas Co Energy Efficiency Partnership Program Agmt 2013-14.doc SIGNATURE PAGE IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their duly authorized representatives. The City: CITY OF REDLANDS eAguilar Name: Sam Irwin' Title: City Clerk Title: Mayor peiisia Date: elpi i 3 The Utility: SCG: SOUTHERN CALIFORNIA GAS COMPANY: By: Frank Spasaro Title: Energy Efficiency Partnerships Manager Date: 2013-14 City of Redlands.Southern California Gas Co Partnership Agreement 23 I\ca\dim\AgreementsSouthern CA Gas Co Energy Efficiency Partnership Program Agmt 2013-14 doc EXHIBITS Exhibit A—2013-2014 Program Implementation Plan Exhibit B—2013-2014 Goals & Program Budget Exhibit C EM&V Plan Exhibit D—Reporting Requirements Exhibit E—Allowable Costs 2013-14 City of Redlands.Southern California Gas Co Partnership Agreement 24 ‘kca1djm\Agreements1Southern CA Gas Co Energy Efficiency Partnership Program Agmt 2013-14 doc EXHIBIT A 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 for 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: 1, 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 A-1 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 existing Partnership presented for consideration within this PIP 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 a separate set of criteria to address our interest in expanding local government programs. The IOUs developed the following list of expansion criteria that will be applied across each partnership that is included into the program in 2013-2014. 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 2013-2014 include EUC 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. SoCalGas will develop a marketing plan and marketing collateral based on customer segmentation work and research to support outreach efforts. This customer segmentation will A-2 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan help SoCalGas develop an understanding of customers' needs and respond accordingly with products and services that customer's 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, 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 LOP program in 2013- 2014 transition period. SoCalGas has initiated discussions with several potential new partners which are currently in partnerships with SCE. The new partnerships SoCalGas is joining include the following: City of Beaumont Partnership, City of Redlands Partnership, Western Riverside Council of Governments (COG) Energy Partnership, San Gabriel Valley COG Partnership, City of Santa Ana Partnership, City of Simi Valley Partnership, Gateway Cities Partnership,Westside Cities Partnership. SoCalGas has completed the first round of discussions, and is providing draft agreements to new partners.SoCalGas has provided details of the new partnerships herein including their PIPs and budget details. Design for new PIPs is consistent with CPUC guidance including comprehensive and deep retrofits. SoCalGas has considered feedback from LGPs on their needs in moving 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 2013-2014 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. A-3 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 i mpln Amount Amount Budget Amount Local Government Partnership Programs _ 3742 LOP-LA Co Partnership $74,419 $43,431 $316,096 $0 $433,946 3743 LGP-Kern Co Partnership $55,609 $34446 $122,408 $0 $208,464 3744 LGP-Riverside Co Partnership $54,022 $39,305 $200,790 $0 $294,117 3745 LOP-San Bernardino Co Partnership $64799 $38,305 $190,613 $0 $289,717 3746 LOP-Santa Barbara Co Partnership $90_384 $54,461 $84,449 $0 $229,294 3747 LOP-South Bay Goes Partnership $73,335 _ $26,866 $207,731 $0 $307,932 3748 LOP-San Luis Obispo Co Partnership $81,878 _ $47,594 $85,091 $0 $214,563 3749 LGP-San Joaquin Valley Partnership $64,732 $32,033 $97,524 $0 $194,289 3750 LGP-Orange Co Partnership $67,438 532,999 $171,500 $0 $271,938 3751 LGP-SEEC Partnership • $46,659 524,200 _ $224,535 $0 $295,394 3752 LGP-Community Energy Partnership $78,632 $41,305 $132,710 $0 5252,647 3753 LGP-Desert Cities Partnership $10,634 $12,328 $27,638 $0 $50,600 3754 LGP-Ventura County Partnership $99,378 $33.058 $203,725 $0 $336,161 r .9776LGP•Gitsr4 iris NM*** '' .•-- - -� $71;277 '$343✓ -F.$22.S6 - -_•.- .So, t •$326;123, .. 3/777-1 i.CP 14 Gitteki WU.y�I%rIler ip__4%-_:='-. -.�;3g5 :' •` - - 377'6 LG ov51titsAiitPirt flblw."F'•.-f . r' - t -; .. 3774-' Oda COW Pii'Lltinli = . i-: _ r" ~+ y. lly�=• -' -�� ;5� _','--51.6,L�t1'x.: •i+�.��4,i�'r �Q, :' :mai-- 37SW,.L 6Icfbr-otSlmL r Par6lanIM =.f:---"-T,i•_;r ms,' :` swim _ ;I.:scum' _$Ql -_' • S9s.5Lv 3781" LGP�OtC of Win*Piit,Sielitlk I_:A'= :;• % - 54010E -$29.42V-L=6'- --$421564 ' '• :So•_: S12gtl6T L 37 .. tOP-06,Of8àuibErtPthulhl-i,�: :' `$37,799r :. $M212E; .h:540,566: Woe!" 3713: tGFte •Vhietlr .....de piitpi ll0'V-_,-=.. 51013.15E • - $4,x= - $141,70S - ,•SO: . . ,• , MIS5c 3755.-liitiLfacol 41O4iiiimiiiit Eirorsit dltddflcy Nista rslalom 3773 LOP-New Partnership(subject to CPUC ED approva $149,218 $167,124 ' $280,529 • $0 $596,871 3774 ,LGP-LG Regional Resource Placehoider (- $93,194 54,000 $511,673 $0 $644,867 .--__ _____- __ _ -. �..____.. --_a= ToT�i $1,621,215 $1,004,805 $4,185.806 $0 $6,811,828 Note: SoCalGas 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 A-4 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan (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. Program Element A. Government Facilities Al —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 B1 - Code Compliance B2 - Reach Code Support B3 - Guiding Document Support B4- Financing for the Community B5 - Peer to Peer Support C. Core Program Coordination Cl- 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 A -Government Facilities 4—Program Element Description and Implementation Plan—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, with a focus on improving the EE of municipally-owned and —leased buildings, is an offering that most of SoCalGas' Local Government Partners(LGPs) expect to participate in. Exceptions are usually those LGPs that have already upgraded their facilities to the point of saturation 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 A-5 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan distinctive or targeted approach to Government Facilities, that LGP's individual PIP will contain additional information. Example eligible local government facilities/sites include city halls, administrative offices,recreation centers, fire stations, and libraries that are owned or leased by public agencies. Each LG partner,with the support of the Partnership plays an important role in assists its local governments(cities, counties and special districts) departments with retrofitting their facilities 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 to the local government's community a commitment to energy efficiency and the community at large. This, in turn,enables local 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 that opt 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 j Boiler System Retrofits, Boiler Control HVAC, Economizer Water Heating, Solar Thermal Natural Gas Water Pumps Other A-6 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan A2 - Retro-commissioning(RCx): Local Government Partnerships which choose to include a Government Facilities Retro-commissioning element in their programs will provide similar 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 up 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 offerin 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. A-7 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan A5-On-Bill Financing 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-Bill 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. Partnerships will seek opportunities for comprehensive energy efficiency retrofits in municipal facilities to achieve deep retrofits by bundeling a combination of A-8 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan projects such as HVAC, hot water heating, advanced lighting measures, vending machines, and computer networks. By partnering with local governments, Partnerships are well 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. A5—On-Bill Financing Refer to the OBF section included in Testimony Chapter 3 5-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 that will provide overall indicators of how markets as a whole are evolving. MT metrics A-9 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan 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 institutions'', 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 chains5 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 juice signals and may directly counter market transformation progress6. According to York , "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 I 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.califondaenergyefficiency.corn/docs/EEStrategicPlan.pdf 3 Peloza,J.,and York,11(1999)."Market Transformation: A Guide for Program Developers."Energy Center of Wisconsin. Available at:http://www.eew.orgiecwresults/189-1.pdf Bluinstein,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.eeeee.argiconference_proceedings/eceee/2001/Panel 2./p2_7iPaper/ 5 Sebold,F. D.,Fields,A.,Skumatz,L.,Feldman,S.,Goldberg,ICI,Keating,K.,Peters,J.(2001)A Framework for Planning and Assessing Publicly Funded Energy Efficiency.p.6-4.Available at www.calmac.org. 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. 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. A-1 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan 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 transformation8. 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 theory9,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 decades1°. Market share tracking studies conducted 3, 5 or even 10 years after the start of an MT program may reveal only small market transformation effects11. 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.)I2"The Strategic Plan recognizes that regulatory policies are not yet in place to support the success of market transformation efforts13, 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 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 transfotination 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 developersI5 suggests that the first step is not to set end-point definitions, 8 Nadel,S.,Thorne,J.,Sachs,H.,Prindle.B.,and Elliot,RN.(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,5th Ed. 18 Example in bottom chart of this graphic from NYTimes: http://www.nytimes.com/imagepa ges/2008/02/10/o pi nion/lOop.graph ic.ready.h tml Sebold et al(2001)p.6-5, "Peters,LS.,Mast,B.,IgneLTi,P.,Megdal,L.M.(1998).Market Effects Summary Study Final Report: Volume 1."Available at http://calmac.orepublications/19981215CAD0001ME.PDF. 13 CPUC(2008)Strategic Plan,p.5. 14 Nadel,Thome,Saches,Prindle&Elliot(2003). IS Peloza&York,(1999). A-11 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan 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 NH's, the IOUs intend to work closely with partners in establishing baseline code compliance levels and pushing for model reach codes. A-12 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan 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 Energy such energy planning Efficiency documents as Energy Action Action Plans 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 inventory of cities and Codes 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 subject to the effects of many factors and market forces outside the control of program implementers. A-13 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan Table 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 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 c) Program Design to Overcome Barriers: Refer to individual partnership PIP section. d) Quantitative Program Objectives: Table 4 Program Target by Program Target by Program/Element 2013 2014 Target#1 N/A N/A Target#2 N/A N/A Target#3 N/A N/A Target#4 N/A N/A Refer to individual partnership PIP section. A-14 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan 6- Other Program Element Attributes-Element A - 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 program. (PIER)program o "EPA Energy Star Low Carbon IT A-15 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan Other Program Element Attributes Government Facilities Campaign Ally" with their power management savings program. a 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 ESAP 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 ESAP to provide services to middle-income("just above ESAP") customers. 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. A-16 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan Other Program Element Attributes Government Facilities f) Pilots: Describe any pilot projects that are Some of the Pilots may address government part of this program(If this was fiilly 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. Element B-StrateRic Plan Support 4—Program Element Description and Implementation—Element B-Strategic Plan Support B. Strategic Plan Support B1 - Code Compliance B2 - Reach Code 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 (4B —6B) 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 how appropriate anti/or ready each Partner is to undertake activities related to supporting the Strategic Plan. The A-17 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan 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. 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. B1 - 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. A-1 8 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan 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. B3-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,tri tering 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. B4- 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 A-19 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan 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. B5—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 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. A-20 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan 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 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. 5-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."16 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, 16 California Public Utilities Commission Decision,D.98-04-063,Appendix A. "California Public Utilities Commission(2008)California Long Term Energy Efficiency Strategic Plan, p.5.Available at http://www.ealifomiaenergyefficieney,corn/docsJEEStrategiePlan.pdf A-2 I 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan and 9)market structures . Markets are social institutions19, 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 chains2° 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 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 transformation23. 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 Peloza,J.,and York,D.(1999)."Market Transformation:A Guide for Program Developers."Energy Center of Wisconsin. Available at:http://www.ecw,org/ecwresults/189-1.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.eceee.org/conference_pro.ceedings/eceee/2001/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. 'I 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, 22 York,D.,(1999)."A Discussion and Critique of Market Transformation",Energy Center of Wisconsin.Available at http://www.ecw.org/ecwresults/186-1,pdf. 2 Nadel,S.,Thorne,3.,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 24 Rogers(1995)Diffusion of Innovations,5th Ed. 25 Example in bottom chart of this graphic from NYTimes. http://www.nytimes.com/imagepages/2008/02/10/opinioni1Oop.graphicseady.html A-22 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan 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 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 -e• participants. As the Strategic Plan suggests, these may include municipal utilities,local fie 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. 76 Sebold et al(2001)p.6-5, 27 Peters,J.S.,Mast,B.,Ignelzi,P,Megdal,L.M.(1998)....illarket Effects Summary Study Final Report: Volume I."Available at http://calmac.orgipublications/19981215CA D0001M E.PDF 23 CPUC(2008)Strategic Plan,p.5. 29 Nadel,Thorne,Saches,Prindle&Elliot(2003), 3°Peloza&York,(1999). A-23 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan 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 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 Energy territory that have adopted such Efficiency energy planning documents as N/A Action Plans 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 inventory of cities Codes and counties within the IOU territory with adopted model reach codes A-24 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 Improvement over Improvement over documents as Energy baseline, over time baseline, over time 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 Improvement over Improvement over inventory of cities and baseline, over time baseline, over time counties within the IOU territory with adopted model reach codes c) Program Design to Overcome Barriers: Refer to individual partnership PIP section. A-25 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/A N/A Target#2 N/A N/A Target#3 N/A N/A Target#4 N/A N/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) 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. A-26 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan 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 Program Coordination Cl- 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 promote the EUC in 2013-2014 through collaboration with local EUC 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. LGPs will continue work which has been in progress during 2010-12 doing public workshops to promote EUC to the community as well as supporting recruitment of contractors. 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. LGPs that have close ties to Business Improvement Districts(BIDs) will coordinate marketing outreach and education of Core Commercial Programs by: A-27 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan 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 ESAP guideline or to customers who are unable to produce the necessary ESAP 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. Cl - 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. All of the outreach will be coordinated with SoCalGas marketing efforts and statewide marketing energy efficiency marketing initiatives. 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. A-28 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan 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 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. A-29 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan 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. 5-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. 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 technologies32. 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.californiaenergyefficiency.com/docsiEEStrategicPlan.pdf A-30 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan 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 progress36. According to York37,"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 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 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 33 Peloza,J.,and York,D.(1999)."Market Transformation:A Guide for Program Developers."Energy Center of Wisconsin. Available at:http://wwweeworg/ecwresults/ 89-1.pdf 3-4 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/2001/Panel_42_7/Paper/ 35 Sebold,F.D.,Fields,A.,S'kumatz,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. 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://wwwecw.orgiecwresults/186-1.pdf 38 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 39 Rogers(1995)Diffusion of Innovations,5th Ed. A-31 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan 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 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 efforts43,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 interventions . 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 developers45 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 4°Example in bottom chart of this graphic from NYTimes: tnp://www.nytimes.com/imagepages/2008/02/I 0/opi nion/lOop.graph ic,ready.h tm I Sebold et al(2001)p.6-5, 42 Peters,JS.,Mast,B.,Ignelzi,P.,Megdal,L.M.(1998).Market Effects Summary Study Final Report: Volume 1."Available at http://calmac.org/publicationsil 9981215CAD0001MEPDF. CPUC(2008)Strategic Plan,p.5. 44 Nadel,Thorne,Saches,Prindle&Elliot(2003). 45 Peloza&York,(1999). A-32 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan 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 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 Energy territory that have adopted such Efficiency energy planning documents as N/A Action Plans 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 inventory of cities and counties Codes within the IOU territory with adopted model reach codes A-33 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan 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. Internal Market Transformation Planning Estimates 2013 2014 Baseline inventory of cities, counties and government institutions within the IOU territory that have adopted such Improvement energy planning documents as EnergyImprovement over over baseline, Action Plans, Climate Action Plans baseline,over time over time and Sustainability Plans, and General Plans with energy or climate elements. In coordination with Codes and Standards, develop a baseline Improvement Improvement over inventory of cities and counties within over baseline, baseline,over time the IOU territory with adopted model over time reach codes a) Program Design to Overcome Barriers: Refer to individual partnership PIP section. b) Quantitative Program Objectives: Program Target by Program Target by Prod am/Element 2013 2014 Tarlet#1 N/A N/A Tar:et#2 N/A N/A Tar:et#3 N/A N/A Taret#4 N/A N/A Refer to individual partnership PIP section. A-34 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan 6-Other Program Element Attributes—Element C Core Program Coordination 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 governments begin to think about AB32 implementation, GHG emission reduction opportunities will be indentified by modeling usage, past program participation and other trends. A-3 5 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 ESAP 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 ESAP programs and other agency programs, this is an integral part of the program certain partnerships plan to work closely with element and filly covered under#4 note other 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.) A-36 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.Unisue Pro._ am Element Dl-Government Facilities D2-Technical Assistance D3-Financing D4-Peer to Peer Support Overview Local governments 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 2013-2014 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, CPUC 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. 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. A-37 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan 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. D1-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-Financing Local governments often have limited funding and technical resources to secure financing for energy efficiency projects.The Local Government Regional Resource Program intends to 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-38 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan CLa. :c CL th o. 5 e a. 8o § °E. ct' a. 1 g o.s :a g e 8La,' a. 1 1 0 °- & Eg cog u -1E E u t E ct c ct W EC Strategic Planning 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 Yes Yes Yes Yes No No 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 EE through city bonds and Yes Yes Yes No No No 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 Yes Yes Yes Yes No No adopt and implement model reach codes 1-6:Link 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 sticks"using local zoning and Yes Yes No Yes Yes No No development authority. A-39 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan ic„,, z k Pi.c c, .- g 0 t ml 1 .1 et. a w 10 gc 5 u 32 e 0) 0 g S t M strate.ic Planni . S Eii > 7 ,V) ,V, = g (719 I; @ les St . 3 Ne . • .113- .1 .1 J . 0 .? 2-1: Statewide assessment of II No No No I local government code NoNo enforcement and recommendation for cha •e. II 111 I 2-2:c0mpDliraanmceatirithly improve and enforcement of Title 24 building code,and of HVAC N© I No II No permitting and inspection requirements(induding 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 Noo No No No11 component of their professional licensing(as such energy components are adosted . 1111 3-1:Adooptsfpecigovernment efficiency Yes Yes No buildings. 3-2:Require commissioning for new buildings,and re- commissioning and retro- NoIII No No No commissioning of existing buildings. 3-3: Improve access to favorablefinancing terms that create positive cash flow from 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 efficien 3-5:Develop innovation 111 Incubator that competchv. e" ly No No No No No No No selects initiatives for inclusion A-40 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan 0. .€1 a. a a imP 8itS s p 801 . < z' us, 2 2 g ; 8 8 8 leE IC 8 cc Strategic Planning >) in LG pilot projects. 4-1: LGs commit to clean energylclimate 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 governments 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/wastewater end use 4-5:Develop EE-related "carrots"and"sticks"using Yes Yes Yes Yes Yes Yes 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 A-41 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan 13. Ventura County Regional Energy Alliance 14. Gateway Cities Partnership 15. San Gabriel Valley Partnership 16. City of Santa Ana Partnership 17. Westside Cities Partnership 18. City of Simi Valley Partnership 19. City of Redlands Partnership 20. City of Beaumont Energy Partnership 21. Western Riverside Energy Partnership 22. Local Government Energy Efficiency Pilots (Subject to CPUC ED approval)* 23. New Partnership(Subject to CPUC ED approval)* 24. LG Regional Resource Placeholder* *Note items 22—24 are program elements related to compliance requirements or new program elements that may be developed mid-cycle and thus do not have associated sub-PIPs. These program components are addressed below: A-42 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan Program Name: City of Redlands Energy Partnership Program ID: SCG3781 Program Type: Local Government Partnership 1. Program Element Description and Implementation Plan a) List of program elements: The core program elements are similar to those identified in the Master Program Implementation Plan: Government Facilities, Strategic Plan Activities and Core Program Coordination. b) Overview The City of Redlands Energy Partnership is an existing partnership between Southern California Edison and the City of Redlands but is a new added Partnership for SoCalGas in 2013-2014. Redlands has requested that SoCalGas join their partnership with SCE to provide support implementing natural gas-oriented energy efficiency upgrades within municipal facilities and the community at large. The City is very sustainability minded and is interested in leveraging existing SCE efforts with SoCalGas programs to promote green initiatives and EE to the city, its business community, and targeting its residential sector with Energy Upgrade California(EUC) and Energy Savings Assistance(ESA)programs. The Partnership has established a savings target of 3,400 therms from municipal facilities which will be achieved via core rebate and incentive programs. Deep retrofit partnership criteria. This new SoCalGas partnership qualified under the CPUC's transition cycle expansion rules covering Deep Retrofits as described below within Section 3.d. The Redlands Energy Partnership is a Local Government Partnership designed to: • seek innovative approaches to energy efficiency and greenhouse gas (GHG)reduction • encourage adoption of energy efficiency measures and best practices within the municipal government and the broader community by continuing an energy efficiency culture of focused educational and outreach events; and • increase the effective delivery of technical and financial energy services to residents and businesses. Marketing, education, and outreach (ME&O) activities will consist of: • staff training • attendance at the city events; • technical training at the local University of Redlands; • marketing and co-branding with SoCalGas and SCE's core programs geared towards Low-Income Program, such as ESA Program, HEES Program, and CARE/FERA Program; and • Continued participationin Green Communities Program. A-43 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan The partnership activities will be coordinated with recommendations adopted through the city's current climate action task force. Core Program Element A- Government Facilities Government facilities will deliver energy savings during the next transition year program cycle. The Partnership goal is to achieve specified energy savings and greenhouse gas (GHG)reductions from the facilities and infrastructure that it manages. These savings will come from technology retrofits, operational improvements, and policy changes. The City of Redlands will take advantage of partnership incentives for municipal facilities and of eligible rebate, incentive, and technical assistance programs offered by SoCalGas and SCE. A.1)Retrofit of county and municipal facilities Through partnership support, the City of Redlands will conduct energy audits of their municipally-owned and-leased facilities. The Partnership will target comprehensive energy efficiency deep retrofits for all municipally-owned, and—occupied facilities within the partnership jurisdictions Energy savings through deep retrofits will be optimized in accord with the CPUC's transition cycle expansion rules covering Deep Retrofits as described below within Section Id. Potential deep retrofit EE measures may include HVAC systems, Retro Commissioning,hot water heating, advanced-technology lighting measures, and computer networks. A.2)Retro-Commissioning(of buildings or clusters of buildings) The Redlands Civic Center and its corporate yard are the city's largest municipal campus buildings. The partnership will focus on identifying appropriate HVAC retrofit opportunities through the RCx of these and other facilities. This will provide a systematic whole-system approach to energy efficiency and many chronic building problems and energy waste can be resolved by making low-cost or no-cost adjustments identified by the RCx process. A.3) Integrating Demand Response into the audits All retrofit projects will be assessed for opportunities to reduce peak demand. Where feasible and where financing opportunities exist, solar and other alternative energy projects will be considered for project inclusion. A.4)Technical assistance for project management, training, audits,etc. Each partnership has a specific budget for each of these elements. Standard programs available include energy efficiency training, energy audits, and technical assistance in alignment with the Master PIP. The Partnership will also coordinate with the SoCaIREN programs. A.5) Financing Options/On-bill financing The City of Redlands has indicated an interest in using On-Bill Financing upon city council approval. A-44 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan Core Program Element B- Strategic Plan Support B.1) Code Compliance Support The partnership will explore the creation of an improvement program for use with other energy strategies to improve code compliance with building energy standards and appliance regulations. The partnership will conduct focused energy code training through workshops at the nearby University of the Redlands campus. This training will target local businesses, residents, homeowner associations, social groups, seniors, and building professionals. The training will also target the large number of businesses located in the County of San Bernardino "doughnut hole"which falls within the city boundaries of Redlands. B.2) Reach Code Support The partnership will seek to establish meaningful CEC-approved Reach codes as part of its effort to add value to energy efficiency in alignment with the strategies stated in the Master PIP. This activity will follow the proposed path described in the Codes & Standards PIP. B.3) Guiding Document(s) Support In addition to establishing documentation conforming to the strategies expressed in the ELPP Master PIP,the Redlands Partnership will develop an Energy Action Plan and a Climate Action Plan. These plans will document baseline energy use and emissions for use in setting and achieving emission reductions and energy savings. This effort will be coordinated with the activities of the City of Redland's Climate Action Task Force, which helps formulating energy efficiency and GHG reduction recommendations to present to the city's governing body. B.4) Financing for the community The City of Redlands Energy Partnership will develop an education and outreach program for the Redlands' community in alignment with the strategies expressed in the Master PIP. B.5) Peer to Peer Support The Redlands Partnership will actively participate and support in the peer to peer program strategies described in the Master PIP. Core Program Element C - Core Program Coordination C.1)Outreach& Education The partnership will establish a comprehensive Marketing Education& Outreach(ME&O) Plan incorporating: • Educational workshops to assist Redlands and its target sectors in moving forward with energy savings projects, policies, codes, and ordinances; • Events and exhibits to publicize the partnership and its goals(including regional county fairs and home shows); • Mailers,press releases, and quarterly e-newsletters to market energy efficiency programs; and • A minimum of 12 special workshops at the University of Redlands. A-45 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan C.2) Residential and Small Business Direct Install No Direct Install initiatives are planned at this time through SoCalGas. The partnership will launch support of the core program by driving participation through leveraging its chamber of commerce,bill mailing inserts, and public television access. C.3) Small Business Coordination The Partnership will emphasize outreach to and support for small businesses. Our efforts will include coordination with Business Improvement Districts and other business groups (e.g. chambers of commerce, real estate groups, service clubs) to engage small businesses and promote energy efficiency. We will explore potential for cost-effective rebate/incentive programs to encourage energy efficiency actions for small businesses. C.4)Third-party program coordination The partnership will use its direct implementation budget to augment technical and financial resources to help achieve its goals with support from third party programs. C.5) Retrofits for just-above ESA-qualified customers The Redlands Partnership will support this program in alignment with the strategies described in the Master PIP. C.6) Technical assistance for program management,training, audits,etc. The Redlands Partnership will support this element in alignment with the strategies described in the Master PIP. 2. Program Element Rationale and Expected Outcome a) Quantitative Baseline and Market Transformation Information Baseline Metric Metric A Metric B Metric C Program/Element N/A N/A N/A Refer to the overarching PIP section b) Market Transformation Information Market Transformation Planning Estimates Program/Element 2013 2014 Metric A N/A N/A Metric B N/A N/A Metric C N/A N/A Etc. N/A N/A Refer to the overarching PIP section A-46 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan c) Program Design to Overcome Barriers: The City of Redlands Partnership will have barriers consistent with,and will overcome them using, strategies expressed in the Master PIP. d)Statement of Compliance with Deep Retrofits Mandate for New and Expanded Partnerships The newly proposed SoCalGas partnership for the 2013-2014 cycle will have a special emphasis on Deep Retrofit targets, which will have the partnership demonstrate the installation of one or more measures from the following menu(a single measure from below is only considered adequate when combined with a conventional EE measure for the same LG project). A project may also be defined across IOUs(e.g., a joint SoCalGas and SCE project): HVAC solutions Refrigeration solutions Water Heating Wates Energy nexus solutions Combined electricity and gas Retrocommissioning measures Process Solutions(e.g., chillers,blowers,boilers,and storage tanks)* * Process solutions typically address systems improvements.These measures include,but are not limited to items such as chillers,blowers,boilers,and storage tanks; example applications would include reprogramming commercial facility schedules to optimize an HVAC system or modifying laundry facilities to reduce hot water demand. 3. Other Program Element Attributes a) Best Practices: The Redlands Partnership will embody the best practices strategies described in the Master PIP. b) Innovation : Throughout the program, the partnership will: o collaborate with SoCalGas and SCE core programs to develop energy and water conservation programs for the community; o co-sponsor technical courses with the University of Redlands on energy efficiency, green building, and renewable energy generation; o participate in local climate action task force,planning commission, and city council meetings to advocate energy efficiency in local projects that are being considered for approval; o contribute articles to publications; and A-47 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan o work with City of Redlands' departments to promote sustainability through numerous programs(i.e.,recycling,employment education,building retrofits, and other related sustainability initiatives). c) Interagency Coordination: See Master PIP for coordination activities with supporting organizations and agencies. This partnership will benefit from those coordination activities. d) Integrated/coordinated Demand Side Management: The IOUs have identified integrated Demand Side Management(IDSM)as an important priority. As a result they have proposed the establishment of a Statewide Integration Task Force(Task Force). Local government partnerships will monitor the progress of the statewide IDSM efforts and work closely with the Task Force to identify comprehensive integration approaches and to implement best practices. See Master PIP. e) Integration across resource types : (energy, water air quality, etc) The Redlands Partnership will support interagency coordination as stated in Master PIP. 0 Pilots: No pilots are planned through this partnership g) EM&V: See the Master PIP. 4. Partnership Program Advancement of Strategic Plan Goals and Objectives 1-1: Develop,adopt and implement model The partnership will evaluate adopting building energy codes (and/or other green them on a voluntary but rewarded basis, codes)more stringent than Title 24's including excess Title 24 performance in requirements,on both a mandatory and the fee-waiver program or adopting the voluntary basis; adopt one or two new California"Green Building Code"on additional tiers of increasing stringency, a voluntary basis. 1-2: Establish expedited permitting and The partnership will evaluate and adopt entitlement approval processes, fee expedited permitting and entitlement structures and other incentives for green approval processes, fee structures and other buildings and other above-code incentives for green buildings and other developments, above-code developments as appropriate. 1-3: Develop, adopt and implement model The partnership will evaluate and adopt as point-of-sale and other point-of appropriate, a point of sale energy transactions relying on building ratings. disclosure; dependent upon availability of standardized energy star benchmarked data (per recent legislation)on each meter at the _point of sale. 1-4: Create assessment districts or other The partnership will contemplate pursuing mechanisms so property owners can fund the adoption of an AB 811 financing EE through city bonds and pay off on mechanism for its jurisdiction in alignment property taxes;develop other EE financing with the strategies described in the ELPP tools. Master PIP. A-48 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan 1-5: Develop broad education program and The partnership,with other partnerships, peer-to-peer support to local govt's to participate in three comprehensive peer to adopt and implement model reach codes peer educational and outreach forums on a bi-annual basis that emphasize specific actions to take to help achieve the local agencies' Reach code goals. 1-6:Link emission reductions from"reach" The partnership will evaluate how DSM codes and programs to ARB's AB 32 programs might achieve AB 32/ SB 375 program compliance requirements and will be integrated as appropriate. 2-2: Dramatically improve compliance The partnership will support developing with and enforcement of Title 24 building and implementing Training and Education code,and of HVAC permitting and programs to achieve additional T-24 inspection requirements (including focus compliance. on peak load reductions in inland areas). 2-3: Local inspectors and contractors hired The partnership will evaluate and adopt as by local governments shall meet the appropriate,policies regarding energy requirements of the energy component of components of the professional licensing of their professional licensing(as such energy local inspectors and contractors hired. components are adopted). 3-1: Adopt specific goals for efficiency of The partnership goal is to achieve the ELP local government buildings, including: model silver target level in its municipal facilities resulting in at least a 5%savings over the 2005 energy use baseline during the 2013-2014 partnership. 3-2: Require commissioning for new The partnership will evaluate and adopt as buildings,and re-commissioning and retro- appropriate, commissioning,performance commissioning of existing buildings. measurement, and verification as a core part of their energy action plan. 3-4: Explore creation of line item in LG The partnership will evaluate and adopt as budgets or other options that allow EE cost appropriate, creation of a line item in their savings to be returned to the department budgets or other options that allow EE cost and/or projects that provided the savings to savings to be returned to the department fund additional efficiency. and/or projects that provided the savings to fund additional efficiency. 3-5: Develop innovation Incubator that N/A competitively selects initiatives for inclusion in LG pilot projects. 4-1: LGs commit to clean energy/climate The partnership will evaluate and adopt as change leadership. appropriate, a Strategic Energy Plan that includes long and short-term energy and sustainability objectives in line with the adopted California Long Term Energy Efficienc Strateic Plan. A-49 2013-2014 Energy Efficiency Programs Local Government Partnership Program Program Implementation Plan 4-2: Use local governments' general plan The partnership will evaluate and adopt as energy and other elements to promote appropriate, development of aggressive energy efficiency, sustainability and sustainability goals into their General Plan climate change. Updates that include emphasizing sustainability through green building design and technologies, reduction of GHG emissions, increased use of renewable energy, and conservation of existing sources of energy. 4-4: Develop local projects that integrate EE/DSM/water/wastewater end use and promote water/energy nexus. 4-5: Develop EE-related"carrots" and As required, the partnership will evaluate, "sticks" using local zoning and develop, and adopt zoning and development authority development authority changes to comply with AB 32 and SB 375. Through the addition of SoCalGas,the partnership will add natural gas usage reduction and water efficiency programs, with low flow aerators and shower head measures. A-50 EXHIBIT B SOUTHERN CALIFORNIA GAS COMPANY 2013-2014 GOALS & REDLANDS ENERGY PARTNERSHIP BUDGET Natural Gas Savings Target: 2013 2014 2-year Total SCG 1,700 Therms 2,700 Therms 3,400 Therms Other non-resource goals are contained in the SCG PIP in Exhibit A 2013-14 SCG City of Redlands Energy Partnership Budget 2013-2014 Redlands Total Non-Incentive Budget $36,000 SCG Incentive From SCG Core Programs(1) $3,400 SCG Authorized Budget SCG Administrative Other $78,349 SCG Administrative Overhead $5,717 Total Utility Authorized Budget $84,066 City of Redlands Authorized Budget $36,000 2013-14 Total Non-incentive Program Budget $120,067 Projected Allocations for City of Redlands Authorized Budget $36,000 2013 2014 Administration Marketing& Outreach $7,000 $7,000 Direct Implementation $11,000 $11,000 Incentive(I) $1,400 $1,400 1) Incentive is a part of SCG Core Program's Incentive Budget. The incentive level is$1.00 per therm for calculated measures and have an 80% cap, whichever is less, and subject to program caps. Incentives for deemed measures are in accordance with the incentive levels for the applicable SCG Core Programs. December 13,2012 EXHIBIT C EM&V Plan [TO BE ATTACHED WHEN ISSUED BY THE COMMISSION] 2013-14 City of Redlands Energy Efficiency Partnership Agreement 0 Exhibit D — Reporting Requirements Note: This set of requirements may be updated periodically. 1. Program Reporting Contractor shall provide the COMPANY with the requisite information on the prior month's activities, accomplishments, and expenditures related to its respective Authorized Work obligations using COMPANY's invoicing and reporting system. 2. Monthly Report 2.1 Program Data—A spreadsheet table or tables listing which includes the following information: Program Costs (cost reported cumulative-to-date[also referred to as inception-to-date]) a. Program identification number as provided by the COMPANY Representative b. Program name c. Total cumulative program authorized budget as adopted by the CPUC d. Total cumulative program operating budget which includes any mid-course budget modifications(e.g., fund shifts) e. Total cumulative program expenditures f. Total program expenditures for the report month g. Total cumulative commitments(limited to incentive commitments) Program Impacts (cost reported cumulative-to-date[also referred to as inception-to- date]) n/a 2.2 Program Changes/New Program Information If applicable, the following information should be reported in the Monthly Report a. Identification of program with operating budgets reduced during the report month b. Identification of program with operating budgets increased during the report month c. Identification of program terminated during the report month d. Identification of program measure changes—additions or eliminations e. Identification of program measure incentive changes 3. Quarterly Report 3.1 Portfolio Benefit/Cost Metrics (Cumulative to Date) n/a 3.2 E3 Calculator n/a 01-01-2013 Proprietary & Confidential Page D-1 Schedule B— Scope of Work 3.3 Expenditures for the Program per cost a. CPUC Authorized Budget b. Operating Budget c. Total Expenditures i. Administrative Cost ii. Marketing/Advertising/Outreach Costs iii. Direct Implementation 3.4 GBI Report—Progress towards achieving goals of the Green Building 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. n/a c. n/a 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. n/a 3.5 Program Narratives—For the Program, a description of the program activities occurring during the quarter should include: a. Administrative activities b. Marketing activities c. Direct Implementation activities d. Implementer's assessment of program performance and program status(is the Program on target, exceeding expectations, or falling short of expectations, etc.) e. 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 f. Discussion of changes in program emphasis(new program elements,less or more emphasis on a particular delivery strategy, program elements discontinued,update on successful or unsuccessful measure(s)etc.) g. Discussion of near term plans for the Program over the coming months (e.g., marketing and outreach efforts that are expected to significantly increase program participation, etc.) h. Changes to staffing and staff responsibilities,if any i. Changes to contacts, if any j. Changes to subcontractors and subcontractor responsibilities,if any k. Number of customer complaints received 1. Program Theory and Logic Model if not already provided in the Program's implementation plan, or if revisions have been made 01-01-2013 Proprietary & Confidential Page D-2 Schedule B— Scope of Work 4. Annual Reports The Contractor will be required to fulfill the CPUC's annual reporting obligations for their program. 5. Reporting Terminology Definitions Adopted Program Budget—The program budget as it is adopted by the CPUC. 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). 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.) 6. Measure Classification n/a 7. Allowable Costs—Refer to Exhibit E Exhibit E contains a letter from the CPUC dated October 22, 2009 regarding how costs should be categorized per D. 9-09-047) and the Allowable Costs Table from the Administrative Law Judge's Ruling on Reporting Requirements, February 21, 2006 (Docket No. 01-08-028) . The letter includes guidance to questions posed regarding: energy efficiency portfolio administrative costs and IOU Proposed Mapping of CPUC's Adopted Definitions, category cost caps and category cost targets. The letter and guidance supplement the Allowable Costs Table without changing the specific table. Contractor should rely on both the CPUC letter and the Allowable Costs Table to categorize costs invoiced to the COMPANY as part of this contract. 01-01-2013 Proprietary & Confidential Page D-3 Exhibit E - Allowable Costs The following information describes the way costs for all ratepayer funded energy efficiency programs should be categorized. Item 1, the memo, "Re: 2010-2012 Energy Efficiency Portfolio Administrative Costs", dated October 22, 2009,provides guidance regarding cost categorization resulting from the California Public Utility Commission's Decision approving utility 2010-2012 programs(D.09-09-047). Item 2, the Allowable Costs Table is the primary source for categorization of costs. Contractors shall use both of these documents to correctly categorize costs under this contract. Please note that this information may be subject to change. 01-01-2013 Proprietary & Confidential Page E-1 1. Memo re: 2010-2012 Energy Efficiency Portfolio Costs STATE OF CALIFORNIA ARNOLD SCHWARZENEGGER Governor PUBLIC UTILITIES COMMISSION 505 VAN NESS AVENUE 44MR: SAN FRANCISCO,CA 94102-3290 ;,s3 October 22,2009 Shilpa Ramaiya, Pacific Gas and Electric Company Don Arambula, Southern California Edison Athena Besa, Sempra Utilities Re: 2010-2012 Energy Efficiency Portfolio Administrative Costs Monday afternoon October 19, we had a discussion regarding how administrative costs should be categorized in light of the energy efficiency portfolio decision(D. 09-09-047)and the overall budgets. Energy Division has consulted with the CPUC divisions and attaches some guidance to the questions posed. We also have added to your list of categories provided to us for the discussion. We hope that we have addressed your concerns in a timely manner. Please feel free to contact either Cathy Fogel at(415) 703-1809 or me should any questions arise. Yours truly, Anne Premo California Public Utilities Commission Energy Efficiency Planning Section 770 L Street, Suite 1050 Sacramento, CA 95818 (916) 324-8683 cc: Sandy Lawrie,Pacific Gas and Electric Company Jeanne Clinton, CPUC 01-01-2013 Proprietary & Confidential Page E-2 2010-2012 Administrative Cost Cap and Targetsquestions,Issues and Recommendations 1) TRAVEL COSTS: OUs want travel costs for direct implementation non-incentive(01-NI)and for marketing to be billed to those respective categories, rather than to administrative costs.The allowable costs attachment(ACA) (2006, cited in December 12,2009 Ruling in D.08-07-021)is silent on this.The ACA does,however,include EM&V travel in the EM&V category. IOUs would like to charge travel/time for staff participation In Strategic Plan workshops in that category. Recommendation: a)Travel costs for IOU staff to travel to workshops regarding the Strategic Plan can be billed to EM&V travel; b)Travel costs for DI-NI activities and marketing can be charged to those respective cost categories;c)travel costs to EE conferences may be charged to administrative costs. . Justification: It is standard practice within the CPUC accounting division to allow travel costs—such as meeting with customers,etc--to be charged to the applicable program area (ie, to DI-NI or to Marketing and Outreach (M&).Travel costs by IOU staff should be limited, but this will be achieved via the cost targets for M&O and 01-NI. 2) CONFERENCE TRAVEL AND FEES/UTILTY SPONSORSHOP OF CONFERENCES:The IOUs suggest that all travel and fees related to EE conferences are appropriate administrative costs. However, ED has conferred with CPUC accounting and we jointly recommend that IOU sponsorship of conferences, i.e. "platinum""gold"level sponsorships of conferences, are explicitly prohibited as allowable IOU EE conference costs.Sempra reports that its sponsorship of such conferences are currently billed as corporate costs;SCE argues that IOU membership fees in smaller trade oriented associations sometimes includes free entry into related conferences. Recommendation: IOU sponsorships of EE conferences(i.e., "platinum" "gold" level donations)be explicitly prohibited from inclusion in EE budgets as administrative costs. IOUs may join membership- basedissue'spedfic(ie. HVA[) tradeor0anizadonsthatinc|udeasocomponentofmennbemhipbeneOto entry into conferences.Other staff travel costs to participate in EE conferences are also allowable administrative costs. Justification: IOU sponsorship of major national EE conferences is corporate marketing, not EE program work. IOU staff may participate in such large conferences through regular entry fees in the case that IOU staff are presenting or have targeted educational or networking goals for specific conferences;these are justifiable EE administrative costs. 3) BENEFITS/PENSIONS/PAYROLL TAXES: lOUs want to place vacation and sick leave costs relating to labor costs for DI, M&O in those categories,stating that"these follow labor charges." The ACA places these costs in the administrative cost category, but for EM&V states that benefits, payroll tax,and pensions are in the EM&V cost category. All lOUs currently place all EE staff pensions and benefits in the GRC; SCE also includes EE payroll taxes in the GRC,whereas Sempra and PG&E currently place those under administrative costs. Recommendation: IOUs should be allowed to continue to place EE pension and benefit costs in the GRC. However,the IOUs should be required to consistently place EE payroll taxes as general EE administrative costs(i.e.SCE should change its current practice of placing these costs in the GRC). Labor vacation and sick leave costs should follow labor as the IOUs have proposed. 01-01-2013 Proprietary & Confidential Page E-3 Justification: It is CPUC standard practice to allow IOUs to recoup benefit and pension costs in the GRCs, whereas payroll taxes are typically recouped as administrative costs. It is also standard CPUC prctice to allow vacation and sick leave costs to follow labor costs(i.e.,to DI-NI, DI, M&O). 4) INFORMATION TECHNOLOGY COSTS: IOUs want IT costs related to tracking systems for individual programs to be charged to M&O/DI respectively, and that only overall portfolio IT equipment and work should be charged to administrative costs. Recommendation: IOUs should be permitted to charge program-specific IT costs to the relevant DI/M&O program categories. EM&V and other portfolio-level IT costs should be charged to administrative costs except in the case that these constitute capital costs, such as the recent PG&E request for MDSS cost recovery through the EE portfolio (that request was denied and PG&E referred to the GRC to recoup those Costs). Justification:The ACA is silent on including IT costs in the EM&V category,thus these are reasonably included—as overall portfolio IT costs—in the administrative cost categories,except when these are capital costs,as noted above. It is reasonable that individual programs must have unique and high- quaUty|ToVotemudeve|oped; suchsystemsarecritica|horpro8ramimp|emen1adnnandsawinBu tracking. Comparison data for costs in other states indicate that IT is frequently not included in the administrative cost category,and thus it is reasonable for the CPUC to not require that all IT costs are placed in administrative costs. 5) INCLUSION OF LOCAL GOVERNMENT AND THIRD PARTY M&O AND DIRECT IMPLEMENTATION (NON-INCENTIVE)(DI-NI)COSTS IN THE 6%AND 20%COST CAPS: In recent discussions between EE and IOU staff,some confusion arose as to whether LGP/3rd Party M&O and DI-NI costs are subject to the 6% and 20V6 cost targets. Recommendation: LGP and3rd Party M&O and DI-NI costs are subject to the 6%and 20%overall portfolio cost targets. Justification: D.09-09-047 is silent on ring-fencing LGP/3rd Party costs outside of the cost caps. Controlling these costs is important in order to increase incentives offered directly to customers. It should be noted,however,that the M&O and DI-NI cost targets are targets, not caps(p.71&72; OP 13) and that in the compliance filing an accompanying IOU explanation of why exceeding these caps is critical to program implementation should be sufficient to justify exceeding these targets if special circumstances can be explained. Special circumstances may be warranted in a variety of cases. For instance, in the case of SCE, up to$50 million in non-resource program direct implementation costs were either not identified by ED in our analysis(OBF program)or added as part of the budget adjustment($32 million for LGP Strategic Plan innovative programs). IOU Proposed Mapping of CPUC's Adopted Definitions. CAP'S and Target's: Administrative Activities — 10% CAP [see citation 1 below] - Responding to Data Requests(pg 50) - Responding to Financial &Regulatory Audits (pg 50) - Support related to Regulatory Filings (Monthly& Quarterly Reports and Annual Reporting) (pg 50) - Human Resources Support(pg 49) o Payroll taxes o Payroll support - Membership dues - Travel&Conference Costs(Labor, Fee's, Lodging, Transportation, etc.)(pg 49 and 50). IOU Sponsorship ("platinum""gold""silver"level etc) is prohibited as an EE allowable travel cost. Such costs should be recouped in the GRC. - Information Technologies Support and Services (pg 50) o Licensing fees or IT development cost for program specific applications for implementation are part of DI(benchmarking tool or Project Management tool) - Accounting support(pg 50) - Strategic Planning Administrative& Logistical Costs Related to Workshops(pg 57) - Vacation and Sick Leave Related to Administrative Labor—follows labor charges(pg 50) - Supply Management function activities to ensure oversight of contractors(pg 50) - Administering contractor payments for services which are non incentive related(pg 50) - Reporting Data Base(i.e. CRM,Track It Fast, Program Builder, SMART, etc.)(pg 50) - Facility Related Costs - Administrative Assistant Activities(pg 49 & 50) - Utility administrative cost associated with Local Government Partnerships &Third Party programs 10% Administrative Cost "Target" for Third Party and Local Government Partnership Direct Cost (Separate from Utility Cost to administer these pro. .ms, see citation 2 below) (pg 63) Marketing Activities (within programs) — Target 6% (pg 238 and 239) See CPUC allowable cost category definitions and see citation 3 below. - Preparing Collateral - Distributing Collateral - Support related to Outreach Events - Participating in Outreach Events - Advertising, Media, Radio,Newspaper, Website and Magazine related Marketing Activities 01-01-2013 Proprietary & Confidential Page E-5 - LGP marketing& outreach related to Long-Term Strategic Planning support - Vacation and Sick Leave Related to Marketing Labor—follows labor charges(pg 50) - Marketing-specific IT costs - Staff travel to undertake marketing-specific work activities(excluding conference participation). Direct Implementation Activities — Target 20% [see citation 4 below] - Employees who have a direct interface with the customer(i.e. Account Executives, Auditors, Engineers, Processors, Inspectors, call center representatives) (pg 50) - Processing Rebate applications(pg 50) - Inspecting rebated/incentivized measures(pg 50) - Engineering related activities (pg 50) - Measurement Development(Pg 50) - Education and Training Contractors/Partners/Customers (pg 50) - Project Management Activities(i.e. Planning Scope of work, working with contractors and customers, setting goals,reviewing goals,reacting to market conditions, and customer calls)(pg 50 and pg 57) - Program Planning, Development and Design(pg 57) - Emerging Technologies Program Management Activities (pg 50) - WE&T Program Management Activities (pg 50) - On Bill Financing Program Management Activities (pg 50) - Customer Support(pg 50) - Energy Audits and Continuous Energy Improvement (pg 50 & 192) - Market Transformation and Long-Term Strategic Plan Support(pg 51) - Compiling and maintaining information for projects(pg 50 and pg 57) - Licensing fees or IT development cost for program specific applications for implementation are part of DI(benchmarking tool or Project Management tool) - Vacation and Sick Leave Related to Direct Implementation Labor follows labor charges (pg 50) - Direct-implementation specific IT costs - Staff travel to undertake direct implementation-specific work activities(excluding conference participation). Target of 20% on "non-resource" support costs which includes direct implementation non-incentive costs associated with incentive-based programs, such as education and training, engineering support and project management, and long term strategic plan support. (Pg 6) EM&V Activities: - Staff travel to participate in Strategic Plan workshops - Market, cost assessment and other studies as relevant to or suggested in the Strategic Plan 01-01-2013 Proprietary & Confidential Page E-6 Decision 09-09-047 Citations Citation 1: Administrative Costs (p.49, OP#13a) [p.49] 4.4. Administrative Costs We impose a 10% cap on total administrative costs, defined as overhead (General and Administrative (G&A) Labor and Materials), labor (Management and Clerical), Human Resources (HR) Support and Development, Travel and Conference Fees (Administrative Costs). Administrative costs are a necessary component of implementing energy efficiency programs. Utilities have a number of administrative duties including reporting to the Commission, internal management controls, and oversight of contractors which must be funded in order to carry out their required programs. Administrative costs,3o as we have defined them, include: •Overhead (G&A Labor/Materials): administrative labor, accounting support, IT services and support, reporting databases, data request responses, CPUC financial audits, regulatory filings support and other ad-hoc support required across all programs. •Labor (Managerial & Clerical): This category includes utility labor costs related to either management or clerical positions directly related to program administration. SDG&E and SCG also add payroll taxes. •Travel and Conference fees: This includes labor, travel and fees for conferences. These Administrative Costs categories do not include EM&V or Marketing and Outreach. Direct Implementation costs for delivering programs, which are defined as "costs associated with activities that are a direct interface with the customer or program participant or recipient (i.e., contractor receiving training)," are also excluded.31 Direct Implementation includes non-resource programs such as Emerging Technologies, WE&T, Lighting Market Transformation, Zero Net Energy Pilots, local & statewide DSM integration and On-Bill Financing. Also included are direct implementation non-incentive costs associated with incentive-based programs. These costs include engineering project management, customer support, certain sub-programs (e.g., Energy Audits and Continuous Administrative costs are necessary to well-functioning programs, it is our 01-01-2013 Proprietary & Confidential Page E-7 duty to ensure that administrative costs are reasonable and limited to those overhead and labor costs that are truly required to implement quality programs, so that ratepayer funds are used to the greatest degree possible for the programs themselves. 30A list of allowable administrative costs is attached to the December 2008 Assigned Commissioner's Ruling, at attachment 5-A. 31 February, 2006 AU Ruling in R.01-08-028 on reporting requirements for the utility energy efficiency programs. [Ordering Paragraph #134 a. Administrative costs for utility energy efficiency programs (excluding third party and/or local government partnership budgets) are limited to 10% of total energy efficiency budgets. Administrative costs shall be closely identified by and consistent across utilities. Administrative costs shall not be shifted into any other costs category. Utilities shall not reduce the non-utility portions of local government partnership and third party implementer administrative costs, as compared to levels contained in budgets approved herein, unless those levels exceeded 10% in the July 2009 utility supplemental applications in this proceeding; Citation 2: Administrative Costs- third parties and partnerships (p.63) [0.63] An administrative cost cap of 10% on third party programs and local government programs is also an important component of containing total portfolio administrative costs. However, imposing a 10% administrative cost cap for each program within these categories would be excessively burdensome for utilities, third party contractors and government partners. Therefore, we direct the utilities to seek to achieve a 10% administrative cost target for third party and local government partnership direct costs (i.e., separate from utility costs to administer these programs). As combined total program categories, third party and local government program administrative costs should strive toward the 10% total administrative cost target. In addition, we agree with comments by LGSEC and CCSF on the Proposed Decision that utilities should not be permitted to unduly shift administrative cost cuts onto local government partnership and third party implementers. Therefore, we direct the utilities to not reduce the non-utility portions of local government partnership and third party implementer administrative costs, as compared to levels contained in the budgets proposed by the utilities in their July 2009 applications and approved herein, except where these costs as filed exceed the 10% 01-01-2013 Proprietary & Confidential Page E-8 cost target level. Citation 3: Marketing Activities (p.73, OP#13b) [p-73] Using this data as a guideline for our programs, we reduce the ME&O budget to 6% of the adopted portfolios, which is a reduction from the proposed levels of around 8%, but still above national trends (excluding Vermont as an outlier). This is not a hard cap, as with administrative costs, but a budget target. This target is reasonable. As discussed in the ME&O section, the centerpiece of our ME&O program— the statewide ME&O branding and outreach program— has a budget of$60 million, with additional funding coming from already approved budgets for the LIEE and Demand Response programs. This reduction is also consistent with the direction of D.07-10-032, in which we noted our concerns about the increasing ratepayer costs of ME&O for California's demand side programs and directed a statewide, integrated approach. [Ordering Paragraph #13b] Marketing, Education and Outreach costs for energy efficiency are set at 6% of total adopted energy efficiency budgets, subject to the fund-shifting rules in Section II, Rule 11 of the Energy Efficiency Policy Manual Citation 4: Direct Implementation Activities [p.6, 50, 57, OP#13c] [p.6] Similarly, we place a target of 20% on non-resource support costs.7 7 This activity includes direct implementation non-incentive costs associated with incentive-based programs, such as education and training, engineering support and project management, and long term strategic plan support. [p.50] Direct Implementation costs for delivering programs, which are defined as "costs associated with activities that are a direct interface with the customer or program participant or recipient (i.e., contractor receiving training)," are also excluded.31 Direct Implementation includes non-resource programs such as Emerging Technologies, WE&T, Lighting Market Transformation, Zero Net Energy Pilots, local &statewide DSM integration and On-Bill Financing. Also included are direct implementation non- 01-01-2013 Proprietary & Confidential Page E-9 incentive costs associated with incentive-based programs. These costs include engineering project management, customer support, certain sub-programs (e.g., Energy Audits and Continuous Energy Improvement), market transformation and long term strategic plan support. 31 February,2006 ALJ Ruling in R.01-08-028 on reporting requirements for the utility energy efficiency programs. [P.57] We therefore clarify here that we accept utility categorization of program planning, design and project management costs as direct implementation non-incentive costs and direct our staff to issue a revised guideline describing the details of administrative costs versus direct implementation costs. [Ordering Paragraph #13c] Non-resource costs (excluding non-resource direct implementation costs) are set at 20% of the total adopted energy efficiency budgets; 01-01-2013 Proprietary & Confidential Page E-10 2. Allowable Costs Table — February 21, 2006 Allowable Costs Table The cost items listed on the Allowable Costs sheet are the only costs that can be claimed for bill-payer 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 Company.If there is a desire to include additional Allowable Cost elements,the Company Representative should be contacted in order for the Representative to seek approval from the CPUC.(Source: Administrative Law Judge's Ruling on Reporting Requirements, Docket No.01-08-028,February 21,2006).Invoiced costs will be used by all IOUs for recording expenses for the Energy Efficiency programs as per the adopted allowable costs presented in the Attachment to the 2/21/06 ALJ ruling. Any accompanying costs breakdowns(or detail)shall reflect consistent business costing and normal business operations reporting.(Source:Energy Division Workshop Report:Annual Reporting Requirements and Performance Basis,Docket No.06-04-010,July 20,2007,p. 13) 3/30/2006 Cost Categories Allowable Costs Administrative 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 Im.lementation Labor IOU Benefits-Marketing Advertisin: Outreach Labor IOU Pa oll Tax-Administrative Labor IOU Pa oll 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 Develo•ment and Trainin: Subcontractor Benefits-Administrative Labor Subcontractor Benefits-Direct Implementation Labor Subcontractor Benefits-MarketinWAdvertising/Outreazh Labor Subcontractor Payroll Tax-Administrative Labor Subcontractor Pa oll Tax-Direct Imidementation Labor Subcontractor Payroll Tax-Marketin: Advertif 1: Outreach Labor Subcontractor Pension- Administrative Labor 01-01-2013 Proprietary & Confidential Page E-11 Allowable Costs Table The cost items listed on the Allowable Costs sheet are the only costs that can be claimed for bill-payer 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 Company.If there is a desire to include additional Allowable Cost elements,the Company Representative should be contacted in order for the Representative to seek approval from the CPUC.(Source: Administrative Law Judge's Ruling on Reporting Requirements, Docket No,01-08-028,February 21,2006).Invoiced costs will be used by all IOUs for recording expenses for the Energy Efficiency programs as per the adopted allowable costs presented in the Attachment to the 2/21/06 ALJ ruling. Any accompanying costs breakdowns(or detail)shall reflect consistent business costing and normal business operations reporting.(Source:Energy Division Workshop Report:Annual Reporting Requirements and Performance Basis,Docket No.06-04-010,July 20,2007,p. 13) 3/30/2006 Cost Categories Allowable Costs Subcontractor Pension-Direct Implementation Labor Subcontractor Pension-Marketint 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-Mileage IOU Travel-Parking 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 Posta.e IOU Labor-Accounting Support IOU Labor-Accounts Payable IOU Labor-Accounts Receivable IOU Labor-Administrative IOU Labor-Facilities Maintenance IOU Labor-Materials Manatement IOU Labor-Procurement IOU Labor-Shop Services IOU Labor-Transportation Services IOU Labor-Automated Systems IOU Labor-Communications IOU Labor-Information Technolo: 01-01-2013 Proprietary & Confidential Page E-12 Allowable Costs Table The cost items listed on the Allowable Costs sheet are the only costs that can be claimed for bill-payer 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 Company.If there is a desire to include additional Allowable Cost elements,the Company Representative should be contacted in order for the Representative to seek approval from the CPUC.(Source: Administrative Law Judge's Ruling on Reporting Requirements, Docket No.01-08-028,February 21,2006).Invoiced costs will be used by all IOUs for recording expenses for the Energy Efficiency programs as per the adopted allowable costs presented in the Attachment to the 2/21/06 AU ruling. Any accompanying costs breakdowns(or detail)shall reflect consistent business costing and normal business operations reporting.(Source:Energy Division Workshop Report. Annual Reporting Requirements and Performance Basis,Docket No. 06-04-010,July 20,2007,p. 13) 3/30/2006 Cost Categories Allowable Costs 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 Technolo: Subcontractor Labor-Telecommunications Marketing/Advertising/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 IOU Labor-Marketing IOU Labor-Media Production IOU Labor-Business Outreach IOU Labor-Customer Outreach IOU Labor-Customer Relations Subcontractor-Bill Inserts I Subcontractor-Brochures Subcontractor-Door Hangers Subcontractor-Print Advertisements 01-01-2013 Proprietary & Confidential Page E-13 Allowable Costs Table The cost items listed on the Allowable Costs sheet are the only costs that can be claimed for bill-payer 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 Company. If there is a desire to include additional Allowable Cost elements,the Company Representative should be contacted in order for the Representative to seek approval from the CPUC.(Source: Administrative Law Judge's Ruling on Reporting Requirements, Docket No.01-08-028,February 21,2006), Invoiced costs will be used by all IOUs for recording expenses for the Energy Efficiency programs as per the adopted allowable costs presented in the Attachment to the 2/21/06 AU I ruling. Any accompanying costs breakdowns(or detail)shall reflect consistent business costing and normal business operations reporting. (Source:Energy Division Workshop Report:Annual Reporting Requirements and Performance Basis,Docket No.06-04-010,July 20,2007,p. 13) 3/30/2006 Cost Categories Allowable Costs 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 Category Financial Incentives to Customers Activity-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 El ui oment ' •air and Servicing Subcontractor Labor-Customer Esuiiment R,--8 air and Servicin: 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 lm•lementation 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 IOU Labor-Site Inspections LOU Labor-Rebate Processing IOU Rebate Applications 01-01-2013 Proprietary & Confidential Page E-14 Allowable Costa Table The cost items listed on the Allowable Costs sheet are the only costs that can be claimed for bill-payer 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 Company.If there is a desire to include additional Allowable Cost elements,the Company Representative should be contacted in order for the Representative to seek approval from the CPUC.(Source: Administrative Law Judge's Ruling on Reporting Requirements, Docket No.01-08-028,February 21,2006).InVoiced costs will be used by all IOUs for recording expenses for the Energy Efficiency programs as per the adolited allowable costs presented in the Attachment to the 2/21/06 ALJ ruling. Any accompanying costs breakdowns(or detail)shall reflect consistent business costing and normal business operations reporting.(Source:Energy Division Workshop Report:Annual Reporting Requirements and Performance Basis,Docket No. 06-04-010,July 20,2007,p. 13) 3/30/2006 Cost Categories Allowable Costs Subcontractor Labor-Field Verification Subcontractor Labor-Rebate Processing Subcontractor-Rebate Applications 01-01-2013 Proprietary & Confidential Page E-15