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2006 CEEF Performance Incentive Matrix

Performance Matrix. Balances a wide range of objectives including program results (kw, kwh), portfolio results, benefit, net benefit, market effects, activity milestones, etc. Provides a mechanism to make necessary tradeoffs between multiple and diverse C

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2006 CEEF Performance Incentive Matrix

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    1. 2006 CEEF Performance Incentive Matrix Joe Swift August 2006

    2. Performance Matrix Balances a wide range of objectives including program results (kw, kwh), portfolio results, benefit, net benefit, market effects, activity milestones, etc. Provides a mechanism to make necessary tradeoffs between multiple and diverse C&LM Policy objectives. Measurable and verifiable.

    6. Note the following: Based on planning numbers/table B. Residential is 42.5%. C&I is 57.5%. EB (electric benefit) and NEB (net electric benefit) make up 88% of the performance incentive Some measures/activities roll up into several categories (i.e. E-Star Homes) and will have a “ripple effect” on the overall KPI. Balance mechanism – can’t put all your eggs in one basket!

    7. Electric Benefit (EB) Electric Benefit is the net present value ($ dollars) of the energy saved (kWh) and capacity (kW). Residential Measures – EB = $0.05630 x Life kWh + $1,183.69 x Annual kW. C&I Measures – EB = $0.05031 x Life kWh + $1,803.71 x Annual kW. Exhibit 4 of the 2006 filing.

    8. Net Electric Benefit (NEB) Net Electric Benefit is the Electric Benefit

    9. Net Electric Benefit A Light bulbs costs $8. Savings is 40 kWh for 6 years and kW reduction is 0.003 EB = 40 kwh x 6 years x $0.05630 + $1,183.69 x 0.0055 kw = = $20.02 ($20). NEB = $20.00 - $8.00 = $12.00 B/C Ratio = Electric Benefit/Cost = $20/$8 = 2.5

    10. Scoring Points (EB) and Winning the Game (NEB)

    11. . .

    12. Summary Motivates Portfolio Managers to use skills and ingenuity to obtain greatest possible yield. Maximize benefit AND minimize cost (increases b/c ratio of portfolio) Designed to achieve various diverse objectives and provide a balanced portfolio. Allows flexibility and trade offs, and prevents gaming.

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