Jon_Kaufman@solem.com
This correspondence is written regarding the California Building Performance Contractors Association program proposal entitled "Comprehensive Whole-House Residential Retrofit Program." We request the following additional information regarding your proposal:
Number of retrofits accomplished.
· Pg. 17 of the proposal states "The program's market development goal is the education of public demand to allow completion of a target of at least 1000 retrofits within the program's 21-month term."
· Pg. 26 states that "We have projected conservatively that a total of at least 4000 retrofits can be anticipated with only a two-year extension of the analysis in each of the project's two initial cities, using only the personnel trained initially - i.e., as if our program stopped completely after 2003."
· The TRC table on page 26 expects 2000 retrofits in 2002-2003 only, and 8000 retrofits to 2004, same providers only.
· Page 28 claims that by the end of the second year, some 2000 homes will be retrofitted and within four years, about 8000 homes will be completed by the crews trained during this initial two-year program..."
Page 28 also notes that "In the first two years, CBPCA training can reach a minimum of 200 students in the target areas, comprising at least 50 loosely defined crews (20 in year one, 30 more in year two), with at least half of this new capability committed to pursue this new business. ...Each team will complete at least 50 comprehensive home retrofits per year..."
Using the information from pg. 28 (20 crews trained in year 1, 10 of which perform energy-efficient retrofits of 50 houses each year; 30 crews trained in year 2, 15 of which perform energy efficient retrofits of 50 houses per year), it appears that the crews trained in year 1 will perform 500 retrofits per year; and that the crews trained in year two will perform 750 retrofits per year. Using this information, it is difficult to understand the abovementioned performance targets. More specifically:
· Pg. 17 (1000 retrofits within 21-month period) appears to underestimate.
· The text within page 26 appears to be consistent with these calculations.
· The TRC table on page 26 appears to overestimate the number of retrofits through 2004, as does the claim on page 28.
Please provide clear calculations on how many retrofits are expected to occur at the end of the first year of the program, the end of the second year of the program, at the end of one year after the program is over, and at the end of two years after the program is over.
A response should be provided via e-mail, by noon on Tuesday, March 19, 2002. Please send your response to tdh@cpuc.ca.gov. If you wish to mail a hard copy as well, please use the address listed in the above letterhead, Attn: Tuukka Hess, Energy Division.
Thanking you in advance for your prompt response,
Energy Division Staff
CPUC
March 22, 2002
Energy Division Staff
C/o Tuukka Hess
California Public Utilities Commission
505 Van Ness Avenue
San Francisco, CA 94102-3298
RE: R. 01-02-028: Staff Request for Further Information on CBPCA Proposal
"Comprehensive While-House Residential Retrofit Program"
To the Energy Division Staff:
Thank you for your letter dated March 13. The designated recipient, Jon Kaufman, was out of the country (and still is) so the California Building Performance Contractors Association was unaware of the letter until today, when an assistant checked Jon's e-mail. I have just received this letter from her on Friday afternoon, March 22. We apologize for this communications lapse and hope that you will still find this response useful in your evaluation.
We frankly acknowledge the inconsistency of targets within the CBPCA proposal. The appropriate minimum number of retrofits to be completed was the subject of extensive debate among our participants right up until the proposal was submitted. When the final choice (2000 units) was made, we now see that not all the references in the various sections of the proposal were found and corrected. We make no excuse for this oversight. However, the correct numbers and their underlying logic are easily provided through this letter, and remain realistic and consistent.
The Statements on page 17, 26 and 28 re 1000 retrofits are in error and should have been corrected. As much as we might prefer such a conservative target as cited on page 17, 1000 is incorrect. 2000 is the correct number throughout the proposal. Achievement of only 1000 units would fail to meet your very difficult cost-effectiveness tests. We believe those tests are unduly limited and penalize a growth-oriented program such as ours, but we believe in our program and understand the need for a common basis of evaluation for all proposals.
On page 26, the reference to 4000 units within a 4-year period follows from the 1000, and is also incorrect. The correct estimate of this extended period's completions is 8000, as shown in the table on the same page. This non-linear expansion from 2000 as of yearend 2 to 8000 as of yearend 4 occurs because there is no further training-time penalty and all 50 contractors are working at an average rate of 50 or more completions per year. We actually assume that those crews will gain in efficiency and demand, resulting in a gradual increase in the number of jobs they complete each year.
Our text description of the contractor-capacity logic on page 28 was also in error since it was scaled to the superseded 1000-unit target. The correct number of students within the two cities over two years was intended to be 400 rather than the 200 cited, resulting in 100 "crews" trained over the two years. This is still a realistic expectation given the size of the targeted specialty-contractor populations in those areas. To illustrate this further, we estimated approximately ten training sessions, each divided into 1-day segments for each of four specialties. This results in an average of 10 different students per 1-day session, which we believe is a realistic level of success for our intensive contractor outreach program. These 400 individuals represent a small fraction of the specialty-contractor and key-employee populations in the two target areas. In addition, some of the 400 will be new entrants (e.g., energy raters) rather than employees of existing contractor firms.
The resulting estimates of completions lead to the following totals:
Year 1: 500 (Fresno only)
Year 2: 1750 (Fresno and San Jose)
Subsequent years: 2500-3000 per year (assuming no further training)
The two-year total is 2250, somewhat more than our target. Our intent here was to demonstrate that reasonable assumptions lead to more contractor capacity during the project term than our target, so these numbers tend to lead to a different (higher) total.
We also note that we have been highly conservative in other aspects of our estimates. For example, we assume that fully half the trainees will not pursue the new CBPCA retrofit approach. We also assume that no contractors will leverage our training by expanding their own capability beyond the personnel we actually train-which is a very conservative view. Actual levels of contractor capacity created by our program are likely to be significantly higher than these estimates, particularly if we can begin training in San Jose before the end of the first year. And finally, the estimated average of 50 jobs per crew per year may also be conservative, since in practice many retrofit projects are completed in only 1-2 days of time actually on the job. Each crew may be able to complete well over the 50 jobs estimated.
Although not mentioned in the proposal, we also considered the size of the housing stock in both target areas to be sure that our projected market penetration rate was not unrealistic. The two cities alone, without their surrounding suburbs, constitute about 500,000 homes per the latest housing census. Our 2000 completions therefore represent less than half of one percent penetration over two years-a very conservative
interpretation of the early market demand. Since most contractors (and particularly the larger ones whom we believe will champion this innovative program) actually serve a larger area, the 2000 units actually represent an even smaller market penetration.
The TRC and Participant Test calculations are correct as stated. They are based on 2000 retrofits completed within the 21-month program term. Note in the proposal's spreadsheet that we specify an estimated 1400 completions in Fresno and 600 in San Jose. This is based on the much earlier start in the Fresno area, which has the effect of allowing training of a larger number of contractors in that area and providing more time for them to complete projects.
I hope these explanations provide the information you need. We appreciate this opportunity to further clarify our proposal, and we particularly appreciate the obvious thoroughness of your consideration of this uniquely innovative proposal. If you have further questions, it may be most practical to direct them to me.
For the California Building Performance Contractors Association,
Robert L. Knight
Board Member
(President, Bevilacqua-Knight, Inc.)
510.444.8707
STATE OF CALIFORNIA GRAY DAVIS, Governor
PUBLIC UTILITIES COMMISSION
505 VAN NESS AVENUE
SAN FRANCISCO, CA 94102-3298
March 13, 2002
