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IEPEC Paper: Policy Pathways to Meter-Based Pay for Performance

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August 7, 2019
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IEPEC Paper: Policy Pathways to Meter-Based Pay for Performance

Carmen Best, Director of Policy & Emerging Markets, Recurve

How are different states approaching policy to implement pay-for-performance efficiency? In this paper, to be presented at IEPEC 2019 and written with leading administrators of P4P in California, Oregon, and New York, Carmen Best discusses the policy differences and similarities of three early adopters in the meter-based pay-for-performance space. Understand the pros and cons of focusing on existing contractors and vendors, ramping up pilot programs, and engaging in a larger pivot to a market focus when designing a pay-for-performance policy approach.

Abstract:

The growing traction of performance-based efficiency has major implications for the role of measurement and verification in energy programs. However, the policies that have enabled meter-based pay for performance in three early adopting states have significant differences from each other.

In this paper, we summarize the specific pathways of regulatory and market reform, legislation, and executive order that these three states have followed as means for adoption. Comparing the similarities and differences of these pathways offers insights for other states and jurisdictions considering such a transition. In addition, we will examine how the execution of these policies has also led to differences in the rules and guidelines for pay for performance adopted in each state.

The pathways will be reviewed in three generic categories. The “Market Focus” represents a significant transition to meter-based procurements with large program budgets and authorization to scale enabled through regulatory and market reform. The “Scaled Pilots” path begins with a small scale effort that is proposed and tested and allowed to expand to greater procurements, enabled through legislation that redefines energy savings. Finally the “Focus on Existing Contractors and Vendors” path relies on the past performance and program designs of existing contractors to form the basis of an incremental launch into pay for performance, enabled through executive order.

The challenges and opportunities for each path will be presented based on experience in each state, and the rules and guidelines for evaluation, measurement and verification will be of particular focus.



Is your efficiency program exploring a transition to a performance-based approach? Contact Recurve to learn more about your options.

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