PSC Electric Universal Service Program Evaluation, Technical Proposal 5/25/04

State of Maryland
Public Service Commission

Electric Universal Service Program Evaluation,
Technical Proposal

May 25, 2004

PSC Electric Universal Service Program Evaluation, Technical Proposal 5/25/04

TABLE OF CONTENTS…

TABLE OF CONTENTS

1.Management Summary

1.1Evaluation Summary

1.2Proposal Organization

2.Minimum Qualifications

2.1Capability to Conduct Program Evaluation

2.2Qualifications of Assigned Personnel

3.Scope of Work

3.1The PA/Innovologie Team’s Evaluation Approach

3.2Detailed Work Plan

3.3Study Timeline

4.Qualifications of Project Team

4.1Company Profile

4.2Experience

4.3Evidence of Financial Soundness

4.4References

5.Economic Benefits to Maryland

APPENDIX A:Required Form and Contractual Information

APPENDIX B:Sample Materials

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PSC Electric Universal Service Program Evaluation, Technical Proposal 5/25/04

2. Minimum Qualifications

1.Management Summary

The State of Maryland’s Electric Customer Choice and Competition Act of 1999, passed by the General Assembly and signed into law by the Governor, established deregulation of the electric industry in Maryland and created an Electric Universal Service Program (EUSP) for low-income electric customers. The purpose of the EUSP fund as stated in §7-512-1(a)(1) is “…to assist low-income electric customers with annual incomes at or below 150% of the federal poverty level.” This legislation directed the Public Service Commission (PSC) to establish and the Department of Human Resources (DHR) Office of Home Energy Programs (OHEP) to administer EUSP. The program includes three main components: bill assistance, arrearage retirement, and low-income weatherization. EUSP’s program goals[1] are to:

1. Assist low-income electric customers to meet their electric needs through bill assistance payments, arrearage retirement assistance, education, conservation and self-help strategies that encourage regular, prompt and complete payment of electric bills.
2. Assist low-income electric customers to maintain electric service through bill assistance, arrearage retirement, and electrical energy efficiency (weatherization) services.
3. Target the electric service program to electric customers with the highest annual electric burden (home electric costs divided by household income).
4. Make home electric costs more affordable for low-income individuals through focused programs using available resources and holistic approaches to resolve chronic electric cost issues.
5. Increase participant awareness of efficiency/conservation measures that result in lower and more affordable bills.

The PSC in its oversight of the EUSP issued a Request for Proposals (RFP) on April 16, 2004, that invited individuals and firms with program evaluation experience relating to energy assistance or similar programs to submit proposals to provide a two-year evaluation (July 1, 2004 to June 30, 2006) of the EUSP. The evaluation is only to include the bill payment and arrearage forgiveness components of the program. The RFP states that the evaluation of the EUSP is designed to accomplish three objectives:

• To identify areas for program improvements;
• To document the impacts from program operations; and
• To provide the Public Service Commission and the Department of Human Resources, Office of Home Energy Programs the data and assessment they will need for program oversight and administration.

1.1Evaluation Summary

The following table summarizes the program and the proposed evaluation strategies. A more detailed description of the various evaluation strategies is included in Section 3 of this proposal.

• We will provide timely feedback by summarizing evaluation results in the status reports as activities are completed
• January 31, 2005 interim evaluation report will include demographic analysis, historic utility bill analysis, in-depth interview and program documentation review results, local administering agency best practices study, and recommendations for program improvement
• Final evaluation report will be revised based on the PSC’s and other key stakeholders’ review of the draft final evaluation report. Final evaluation report will build on interim evaluation report and include updated demographic analysis, utility bill payment and customer survey analysis results, identification and assessment of programmatic strengths and weaknesses, and recommendations for program improvements and alternative program policies supported by the data.

1.2Proposal Organization

PA Government Services Inc. (PA) and Innovologie, LLC are pleased to submit this proposal to conduct an evaluation of Maryland’s Electric Universal Service Program (EUSP).

Our proposal is organized by topic area in the order specified in RFP Section 5.7: Written Technical Proposal. The remaining chapters and appendices for the proposal are as follows:

• Section 2: Minimum Qualifications
• Section 3: Scope of Work
• Section 4: Qualifications of Project Team
• Section 5: Economic Benefits to Maryland

Appendix A: Required Forms

Appendix B: Example work products (provided under separate cover).

For purposes of this proposal, the primary point of contact is:

Lark Lee, Principal Consultant

PA Government Services Inc.

PO Box 107

Grantham, NH 03753

Telephone: (603) 863-6133

E-mail:

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PSC Electric Universal Service Program Evaluation, Technical Proposal 5/25/04

2. Minimum Qualifications

2.Minimum Qualifications

The PA/Innovologie team is pleased to respond to the State of Maryland’s request for proposals to provide evaluation services for the Electric Universal Service Program (EUSP).

According to Part III, Qualifications in the RFP, our proposed project team meets and exceeds the minimum qualifications for the following:

• the ability to be conducting the type of analysis stipulated in the RFP,
• as evidenced by the experience and qualifications of the personnel assigned to this project.

In this section we overview our capability to conduct the EUSP evaluation and the experience of the project team. Detailed supporting information of the PA/Innovologie team’s qualifications is included in Section 4, Qualification of Proposed Team, of this proposal.

2.1Capability to Conduct Program Evaluation

As specified in Section 3.2–Program Evaluation of the RFP, our project team has the capability to conduct the EUSP program evaluation.

1. We have successfully completed multi-year evaluations of statewide low-income assistance programs similar to the EUSP. PA will complete as of June 30, 2004 a three-year longitudinal evaluation of the state of Wisconsin’s energy assistance and weatherization assistance programs. The Wisconsin state low-income energy programs include electric-focused interventions (funded through Wisconsin’s public benefits) similar to Maryland’s EUSP in addition to federally funded program activities. The main objective of the Wisconsin low-income energy program evaluation was to quantify program impacts (both energy and non-energy) and provide a comprehensive process evaluation of the programs. This evaluation included multiple process interviews with program management staff, utility representatives, and a census of local administering agencies; a customer panel study with participants and non-participants; an arrearage analysis to characterize program effects on bill payment behavior; and a billing analysis to determine energy and demand savings. We will draw upon methodologies developed and insights gained through this evaluation to strengthen the evaluation of Maryland’s EUSP.
2. Our team has substantial experience in conducting impact evaluations of low-income programs in several states. Innovologie has completed a number of impact evaluations of low-income energy programs. These evaluations include evaluations of two two-year cycles of the Vermont Weatherization Assistance Program. The Vermont evaluation included customers using fuel oil which increases the difficulty of screening the data. PRISM, an industry standard weatherization normalization program, was used to compute the kWh impacts for several hundred customers. The second round of the Vermont evaluation also included an assessment of the non-energy impacts of the program. Innovologie personnel also completed two rounds of evaluation for Missouri Gas Energy. An impact evaluation using PRISM was completed in both rounds and an examination of arrearage levels was completed in the second round. Innovologie has also completed several different impact analyses for Cinergy in Kentucky, Ohio, and Indiana. One of those was an analysis of a pilot program aimed at changing arrearage behaviors. The program included in-home visits that dealt with energy use and budgeting. The analysis proved inconclusive because the sample was small and the reporting schedule to the PUC did not allow sufficient time between the intervention and the analysis to allow the results of the program to be fully measured. Innovologie personnel also developed, Enertrac, a software program that allowed the utility to compare monthly consumption following an intervention with pre-intervention consumption. Nearly all of these evaluations have included comparison groups.
3. We have been extremely successful in conducting low-income population research. PA staff recently completed several low-income research studies including the third wave of a panel study with welfare reform households and performance measurement framework for evaluating the effectiveness of USAID-sponsored programs in increasing the knowledge, awareness, attitudes, and effective behaviors of Georgian low-income energy consumers. Within the last two years, PA has also completed a research study to determine procedures for identifying refrigerators for replacement in low-income households; a multi-state best practices study of low-income weatherization energy education practices and baseload measures; and a process evaluation and installation study of a low-income compact fluorescent lightbulb pilot. We have developed an approach that results in an unprecedented response rate of 50 percent for the low-income population.
4. We provide extensive experience with energy efficiency program evaluations. The evaluation team has significant depth of experience in energy efficiency program design, implementation, and evaluation. For example, together the PA/Innovologie team members have completed over 100 energy efficiency process and impact evaluations. These projects have involved reviews of program materials, previous evaluations, and information systems; in-depth interviews with program design and delivery staff and other stakeholders; quantitative and qualitative data collection with program participants and nonparticipants; secondary data analysis (e.g., census, program databases), and reporting; and impact analysis.
5. Our Maryland and Washington DC locations will foster close coordination and communication with the PSC, OHEP, and other key stakeholders. Innovologie is based in Rockville, Maryland. PA Government Services is based in Washington D.C. The proximity of the offices to the PSC and other State of Maryland offices will allow the PA/Innovologie team to cost-effectively work with the PSC, OHEP, local administering agencies and other key stakeholders.

2.2Qualifications of Assigned Personnel

PA and Innovologie have assembled a team of evaluation experts to conduct the evaluation of the EUSP. Our proposed project team consists of Lark Lee, Dr. John H. Reed, Pamela Rathbun, Laura Schauer, and Dr. Margaret Krecker.

Lark Lee, a Principal Consultant with PA, will serve as the evaluation project manager and primary contact. Lark has specialized in program evaluation for 10 years. Lark is managing the three-year longitudinal evaluation of the Wisconsin energy assistance and weatherization assistance programs. Lark is also managing the evaluation of Targeted Home Performance Program with ENERGY STAR, which provides weatherization services to low-income households that are just over income for the state low-income energy programs. These evaluations are quantifying program impacts through the use of 1) utility billing records for consumption and arrearage analyses and 2) customer survey results. These evaluations also include strong process evaluation components--in-depth interviews with state program staff, local energy assistance and weatherization providers, utility staff, and a three-year panel study of participants and non-participants. Additional evaluation activities include a market characterization of the low-income population using information from the census and the program databases. Lark is also managing an impact and process evaluation of a Residential Energy Assistance Challenge (REACh) pilot designed to improve client bill payment behavior. Lark has managed or played a key role in a range of energy efficiency process and impact evaluations for a variety of US utilities and state agencies. Lark holds a Masters of Policy Analysis and Program Evaluation from the University of Wisconsin.

Dr. John H. Reed, Principal and owner of Innovologie, LLC, will lead the impact evaluation and play a key role in all other evaluation tasks, having worked closely with PA staff on more than a dozen evaluation projects over the past 10 years. John has over 25 years of experience in energy program evaluation. From 1992–1995, John served as Evaluation Director for Wisconsin Demand-Side Demonstrations, Inc. and as a Senior Consultant for HBRS, Inc., Madison, Wisconsin. Previously, he spent nearly 12 years as a researcher and group leader at Oak Ridge National Laboratory in Oak Ridge, Tennessee, and seven years as a faculty member at Bates College in Lewiston, Maine. John has just completed a comprehensive study describing the US commercial building market for the US Department of Energy. John is a leader in studies of the transformation of energy and energy equipment markets with more than two-dozen studies and publications in the area. He has used a diffusion of innovation framework to examine ways to accelerate the adoption of energy efficiency measures and practices. He has completed several studies of the commercial building market in California, New Jersey, the Northwest, and elsewhere. He has also done extensive work in the single-family residential and multifamily sectors. As noted above, he has done substantial work in low-come evaluations in Vermont, Missouri, Kentucky, Ohio, and Indiana, to name a few. He as also completed numerous market segmentation, demand response, logic modeling and performance management studies. John is the current President of the National Capital Region Chapter of the AESP and serves on an Advisory Committee on Evaluation for the Office of Industrial Technology, US Department of Energy. John holds a Ph. D. from Cornell University.

Pamela Rathbun, a Managing Consultant with PA, will serve as a technical advisor to the project. In Pamela’s more than 20 years of experience in the energy area, she has designed and managed many process and impact evaluations of utility energy efficiency and state public benefits programs that were subject to close scrutiny on the part of state regulators and the legislature. She is currently co-managing with Lark Lee the evaluation of the Wisconsin energy assistance and weatherization assistance programs. Pam earned her M.S. in sociology at the University of Wisconsin.

Laura Schauer, a Consultant with PA, will provide assistance in energy assistance program database analysis, customer survey analysis, and utility data analysis. Laura has worked in the field of energy program evaluation for 6 years. Laura’s qualitative experience (conducting in-depth process interviews with energy assistance and utility staff), quantitative data analysis experience (low-income survey design and analysis), and her secondary research skills (including analysis of census and other data specific to low-income households) will make her a valuable contributor to several tasks. Laura has worked closely with Lark and Pam on the three-year evaluation of the Wisconsin energy assistance and weatherization assistance programs and the REACh evaluation.