LDC Program Innovation Guideline

Size: px

Start display at page:

Download "LDC Program Innovation Guideline"

Magdalen Black
5 years ago
Views:

1 LDC Program Innovation Guideline 1. Purpose of this guideline The purpose of this guideline is to describe the process for the development and implementation of new pilot programs designed by local distribution companies (LDCs). 2. Introduction The IESO supports LDC-led program design and market testing of new initiatives through the central services budget. Testing and learning from small-scale pilot programs (pilots) will contribute to the success and cost effectiveness of the full-scale launch of a new program in the Conservation First Framework. Through the piloting process, LDCs have the opportunity to market test the delivery mechanisms and savings realization of new innovative program offerings before including them in their CDM plan and budget. This reduces the program performance risk to the LDC and allows the LDC to fine tune delivery options on a smaller scale. 3. How pilot programs lead to savings and new programs LDCs have the opportunity to design and pilot innovative program concepts, funded outside the CDM Plan. The process has three major steps: 1. development of a preliminary program business case; 2. design of a pilot project that will test and verify program features, including a plan for measurement and verification of pilot savings results; and 3. pilot execution. LDCs are responsible for the design and implementation of pilot programs. The IESO will provide LDCs with the following support: Support for business case development and pilot design, including review of concept and proposed delivery model, market and jurisdictional research, input to design of measurement and verification plan, and financial analysis of cost effectiveness (see Pre- Consultation Request Form in the LDC Toolkit); evaluation (EM&V) of the pilot program; funding for business-case development and pilot execution. Results of pilot programs will be made public so that the LDC community may learn from the experience. Pilot program deliverables such as participant agreements, user guides, worksheets and promotional material will be made available to all LDCs. Page 1 of 5

2 The pilot time frame is 6-12 months, starting from the date the funding contribution agreement is executed and ending on the date the final report is submitted by the LDC to the IESO. Once the pilot is complete and results are verified, the LDC can update its business case and re-submit its CDM Plan, including the new pilot. If successful, new initiatives may be adopted as provincewide programs or by LDCs as local or regional programs (following the approval of a business case for the local/regional program or province-wide program). Please note as of December 31 st, 2018, the IESO will no longer accept LDC Innovation Fund business cases for pilots. LDC Innovation Fund pilots under the Conservation First Framework must inform design changes to existing programs or the design of new programs that can be in market and achieve savings before the end of the current Framework. 4. program concepts and pilots To qualify for support, the programs proposed by LDCs should address at a minimum the following elements: strong potential to deliver meaningful electricity savings before end of Framework; a strong business case built on reasonable and substantiated assumptions; projected TRC>1.3 & PAC>1 new or unique technology, market segment or customer group not currently being served or piloted in the LDC territory and or the province; a focus on summer peak and/or regional system needs; not be duplicative of current province-wide programs (see Avoiding Duplication Guideline); and gas and/or water integration if applicable. The associated pilot projects must be designed to validate the proposed program concept, verify cost effectiveness and savings assumptions and be less than or equal to twelve (12) months in length. As per the policy objectives for the Conservation First Framework, LDCs are encouraged to develop pilots that include the following: collaboration between electric and gas distributors collaboration amongst LDCs pay for performance approach to program delivery programs that target constrained areas with demand reductions and/or measures focused on peak demand reductions programs that target a reduction in GHG emissions achieving cost efficiencies meeting customer needs (of underserved types/sectors) Page 2 of 5

3 5. Funding available to LDCs LDCs may request a maximum of $1 million per pilot initiative. Upon execution of a funding contribution agreement between the IESO and the LDC, the LDC may claim for the eligible expenses listed in the contribution agreement (e.g. project management, marketing, equipment) and will include expenses related to program design and business case/pilot project submission (based on time and materials to a maximum of 10% of the pilot budget). 6. Collaboration LDCs may work together to develop and execute a pilot proposal. One LDC must take the lead in signing the funding contribution agreement and managing the disbursement of funds. 7. Pilot Business Case Submission and IESO Review Process See IESO review process diagram for programs and pilots, saved here: Pilot Execution The business case should include a schedule in the following format: Reports Milestones Delivery Date Mid-point Report Describe milestones Milestones can all be the same date (mid-point report delivery date) or listed individually. Can be specified as XX weeks after contribution agreement execution if preferred. Final Report Describe milestones Milestones can all be the same date (final report delivery date) listed individually. Can be specified as XX weeks after contribution agreement execution if preferred. Reconciliation Report Within 30 days of IESO approving final report Page 3 of 5

4 Each contribution agreements has three major reports: Mid-point Report (which should contain the following) a. Deliverables for included Milestones b. budget update and Expenditures to date. c. An update on the progress of all activities set out in the work plan including approved EM&V plan for the pilot. d. A description of any pilot related property procured, developed or created by the Recipient. e. The Recipient's analysis (strengths, weaknesses) of pilot design and delivery to date. f. Other such information regarding the implementation of the pilot that Recipient considers relevant or that IESO may request. The mid-point report should be submitted when approximately 50% of the work is completed for the pilot, and according to the timeline specified in the business case and executed contribution agreement. A review of a pilot s success to-date will also take place at the mid-point milestone to determine if the pilot should continue or if course corrections are required to ensure success. Final Report (which should contain the following) a. Deliverables for included Milestones b. budget update and Expenditures to date. c. A description of any pilot related property procured, developed or created by the Recipient. d. The Recipient's analysis (strengths, weaknesses, threats and opportunities) of pilot design and delivery as implemented and recommendations for implementation of any follow on program. e. Other such information regarding the implementation of the pilot that Recipient considers relevant or that IESO may request. The final report should be submitted when all of the work is completed for the pilot and according to the timeline specified in the business case and executed contribution agreement. Note, the approved final report will be posted and shared with all LDCs. Reconciliation Report a. Include the following table, which maps to the submitted budget in the business case, as updated in the final report. b. Include copies of all relevant invoices. Page 4 of 5

5 Category Paid to Date Additional Claimed Without HST With HST, if applicable The IESO will review and approve submitted reports within 10 business days. 8. Payments As laid out in the standard funding contribution agreement (see below for location) to be used for all projects, funding for substantiated and IESO-approved expenses will be disbursed as follows: First payment of 25% of budget on signing Second payment of 50% of budget following approval of the mid-point report Final payment on reconciliation of pilot budget following approval of the final report Contribution Agreement Template is saved on the Extranet under LDC Innovation Pilots >>Documents (in the main page) 9. Next steps For questions regarding process or to discuss program concepts, please complete a Program Design Pre-consultation request form ( First-Framework/LDC-Tool-Kit.aspx) and submit to CDMPlans@ieso.ca with the title Business Case Pre-consultation Appendix A Pilot Business Case Template Download the Pilot Business Case Template here: Page 5 of 5

LDC Collaboration Fund Guidelines

LDC Collaboration Fund Guidelines 1. Purpose of this document The purpose of this guideline is to describe the LDC Collaboration Fund s objectives, eligibility requirements, and application, reporting