2. Policy Objectives

The Commission will select a portfolio of programs that is cost effective, provides comprehensive market coverage and falls within specified budget parameters. When evaluating program proposals for 2002-03 and future years, the Commission will determine how well each utility or non-utility program proposal meets these goals and objectives. In doing so, the Commission will use the point values listed beside each objective to rank each proposal. The point values next to each objective represent the maximum possible score for each objective. A perfect score would be 100 points.

1. Long-Term Annual Energy (Gas and Electric) Savings Points: 25

The most important goal of any Commission energy efficiency program is to create permanent and verifiable energy savings over the life-cycle of the relevant energy efficiency. Programs are not required to create immediate short-term energy savings, so long as there is a clear, logical, and verifiable link between program activities and eventual energy savings. In other words, the Commission will strive for sustainability in the consumption behaviors and investment choices its programs are designed to stimulate. In general, long-term energy savings are those that continue over at least a three year period.

2. Cost Effectiveness Points: 20

All proposals for energy efficiency programs will be required to provide an estimate of life-cycle benefits and cost from various points of view, using the assumptions detailed in Chapter 4. The Commission will use this information to compare and rank program proposals designed for similar uses, markets, or customer segments.

3. Addressing Market Failures or Barriers Points: 17

Any program proposed for Commission approval should include a description of the type of barrier it is designed to address or overcome. The following examples of barriers are listed in order of importance; programs may also address other barriers not listed below:

· Higher start-up expense for high-efficiency measures relative to standard-efficiency measures

· Lack of consumer information about energy efficiency benefits

· Lack of financing for energy efficiency improvements

· Split incentives (between owners/landlords and tenants)

· Lack of a viable and competitive set of providers of energy efficiency services in the market

· Barriers to the entry of new energy efficiency service providers

· Lack of availability of high-efficiency products

4. Equity Considerations Points: 15

The Commission will generally prioritize programs that provide access to energy efficiency alternatives for underserved or hard-to-reach markets. Although those customers contribute equally to the funds collected to support program activities, in the past, they have had access to fewer program alternatives than other customers. Chapter 1 provides a more detailed definition of underserved and hard-to-reach markets, either from the point of view of customer class (e.g., multifamily building residents, small businesses) or geography (e.g., rural customers).

5. Electric Peak Demand Savings Points: 10

Programs paid for by electric public goods charge (PGC) funds should emphasize long-term and permanent peak demand savings. Such programs may include, for example, installation of permanent measures to reduce peak demand, such as variable-speed drives on motors, but should not include programs that create peak demand savings only through temporary behavioral change, such as air conditioner cycling or programs that encourage consumers to turn off lighting or air conditioning.

6. Innovation Points: 8

The Commission will prioritize programs that present new ideas, new delivery mechanisms, new providers of energy efficiency services, or new and emerging technologies to address new program areas, to overcome existing shortcomings, or to improve the effectiveness of existing programs.

7. Synergies and Coordination With Programs Run by

Other Entities Points: 5

To minimize confusion and overlap for consumers, the Commission desires program proposals that take advantage of synergies or coordination with other existing programs, including those run by other state agencies, private entities, municipal utilities, or the federal government.

After the initial review process, proposals that are ranked comparably will be subject to a second level of review. Criteria that will be taken into account during this state will include the following: qualifications and experience of the proposer or team, timeline, continuity and budget.