§ 235. Heating and process fuel efficiency program

(a) After consultation with fuel dealers, any appointed efficiency entity, financial institutions, the Commission, representatives of the weatherization program, and other stakeholders, the Department of Public Service shall propose, develop, solicit, and monitor any combination of energy efficiency and conservation programs, measures, and compensation mechanisms to provide fuel efficiency services on a statewide basis for Vermont heating or process fuel consumers. The Department shall select one or more service providers as needed and pursuant to a competitive bidding process to implement those programs, measures, or compensation mechanisms by means of performance-based contracts that are based upon verified savings in energy usage and demand, and other performance targets. The contracts entered into during the first year after March 19, 2008 shall be for a period of time of no greater than three years. Those programs, measures, and compensation mechanisms shall include fuel efficiency services that:

(1) produce whole building and process heat efficiency, regardless of the fuel type used;

(2) facilitate appropriate fuel switching; and

(3) promote coordination, to the fullest practical extent, with the electric efficiency programs established and administered pursuant to this chapter, as well as with low-income weatherization programs and any utility energy efficiency programs.

(b) Prior to the Department of Public Service entering a contract with service providers under this section and after such notice and hearings as it may require, the Public Utility Commission shall review the programs, measures, and compensation mechanisms selected by the Department to determine whether these programs, measures, and compensation mechanisms promote the public good. The Commission may alter or impose conditions on any combination of these programs, measures, or compensation mechanisms as it deems necessary to promote the public good. If the Department thereafter changes the programs, measures, or compensation mechanisms, it shall request review under this section by the Commission prior to implementing those changes.

(c) Funding for the program established under this section shall be provided from the Fuel Efficiency Fund established under section 203a of this title. During fiscal year 2009, any contracts or grants to be made from the Fund for other than administrative purposes shall be subject to appropriation by the General Assembly. The Department shall provide the Joint Fiscal Committee, at the Committee's November 2008 meeting, with a preliminary report on the program to be presented to the Public Utility Commission.

(d) The Department, subject to the oversight of the Commission, shall:

(1) Ensure that all retail consumers, regardless of retail electricity, gas, or heating or process fuel provider, will have an opportunity to participate in and benefit from a comprehensive set of cost-effective energy efficiency programs and initiatives designed to overcome barriers to participation.

(2) Require that continued or improved efficiencies be made in the production, delivery, and use of energy efficiency services, including the use of compensation mechanisms that are based upon verified savings in energy usage and demand, and other performance targets specified by the Commission. The linkage between compensation and verified savings in energy usage and demand (and other performance targets) shall be reviewed and adjusted not less than triennially by the Commission.

(3) Build on the energy efficiency expertise and capabilities that have developed or may develop in the State.

(4) Promote program initiatives and market strategies that address the needs of persons or businesses facing the most significant barriers to participation.

(5) Promote coordinated program delivery, including coordination with low-income weatherization programs, other efficiency programs, and utility programs.

(6) Consider innovative approaches to delivering energy efficiency, including strategies to encourage third-party financing and customer contributions to the cost of efficiency measures.

(7) Provide a reasonably stable multiyear budget and planning cycle in order to promote program improvement, program stability, enhanced access to capital and personnel, improved integration of program designs with the budgets of regulated companies providing energy services, and maturation of programs and delivery resources.

(8) Develop and approve programs, measures, and delivery mechanisms that reasonably reflect current and projected market conditions, technological options, and environmental benefits.

(9) Provide for delivery of these programs as rapidly as possible, taking into consideration the need for these services, and cost-effective delivery mechanisms.

(10) Provide for the independent evaluation of programs delivered under this section.

(11) Require that any service provider under this section deliver programs in an effective, efficient, timely, and competent manner and meet standards that are consistent with those in section 218c of this title, the Board's orders in Public Service Board docket 5270, and any relevant Board orders in subsequent energy efficiency proceedings.

(12) Require verification, on or before January 1, 2011, and every three years thereafter, by an independent auditor of the reported energy and capacity savings and cost-effectiveness of programs delivered by any entity selected to be a service provider under this section.

(13) Ensure that any energy efficiency program implemented under this section shall be reasonable and cost-effective.

(14) Consider the impact of programs delivered under this section on the amount of fuel used, fuel prices, and fuel bills.

(15) Ensure that the energy efficiency programs implemented under this section are designed to make continuous and proportional progress toward attaining the overall State building efficiency goals established by 10 V.S.A. § 581, by promoting all forms of energy end-use efficiency and comprehensive sustainable building design.

(e) Any disputes under this section shall be resolved by the Commission. (Added 2007, No. 92 (Adj. Sess.), § 15.)