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2006-2008 Energy Efficiency Programs Request for Proposal: Bid Number RFP-F-006-06-DJC

PACIFIC GAS AND ELECTRIC COMPANY

REQUEST FOR PROPOSALS

FOR COMPETITIVELY BID THIRD PARTY ENERGY

EFFICIENCY PROGRAMS FOR THE

2006-2008 ENERGY EFFICIENCY PORTFOLIO:

INNOVATIVE PROPOSALS TARGETED PROPOSALS

BID NUMBER: RFP-F-006-06-DJC

BIDDER’S MANUAL INCLUDING ATTACHMENTS AND EXHIBITS

2006-2008 Energy Efficiency Programs Request for Proposal: RFP-006-06-DJC

TABLE OF CONTENTS

PAGE

1.0 INTRODUCTION 12.0 DEFINITIONS 133.0 PROGRAM AND BIDDER ELIGIBILITY REQUIREMENTS 134.0 BUDGET AND PAYMENT 155.0 RFP PROCEDURE 186.0 SUBMISSION REQUIREMENTS 207.0 PROPOSAL REQUIREMENTS 218.0 EVALUATION PROCESS AND CRITERIA 389.0 CONTRACTOR VALUES 3810.0 CONFIDENTIALITY 3811.0 NON-EXCLUSIVITY 39

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ATTACHMENTS

ATTACHMENT 1: PG&E AVOIDED COST CALCULATOR* ATTACHMENT 2: COMPANY AND EMPLOYEE INFORMATION ATTACHMENT 3: REFERENCES ATTACHMENT 4: LICENSE AND INSURANCE INFORMATION ATTACHMENT 5: SUPPLIER DIVERSITY STATEMENT ATTACHMENT 6: REQUESTED EXCEPTIONS TO PG&E’S CONSULTING SERVICES GENERAL CONDITIONS ATTACHMENT 7: LABOR RATES ATTACHMENT 8: SIGNATURE PAGE

EXHIBITS EXHIBIT 1: 2006 – 2008 PORTFOLIO SUMMARY* EXHIBIT 2: AREAS FOR BID EXHIBIT 3: PORTFOLIO AND SECTOR YIELD (LEVELIZED COSTS) EXHIBIT 4: BID EVALUATION CRITERIA EXHIBIT 5: PG&E’S CONSULTING SERVICES GENERAL CONDITIONS* EXHIBIT 6: PG&E-DRAFTED SPECIFIC CONDITIONS EXHIBIT 7: CONTRACTOR VALUES EXHIBIT 8: PG&E NONDISCLOSURE AND USE OF INFORMATION AGREEMENT EXHIBIT 9: PROGRAM METRICS EXHIBIT 10: PY2004-05 CPUC REPORTING REQUIREMENTS* EXHIBIT 11: 2002 NAICS CEE SEGMENT MAPPING* *These documents are posted on PG&E’s website at:

www.pge.com/3PEnergyEfficiencyRFP

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http://www.pge.com/3PEnergyEfficiencyRFP


SPECIFIC CONDITIONS 1.0 INTRODUCTION

1.1 Pacific Gas and Electric Company (PG&E) has transformed its energy efficiency program portfolio to a new vision and program delivery paradigm. This transformation is intended to achieve several objectives: reduce costs, increase customer satisfaction, better achieve the California Public Utilities Commission’s (CPUC) energy savings targets and PG&E’s resource procurement needs. The new vision is for market-segment based program design and delivery. The new program design paradigm is for programs to be designed and delivered by three different entities: PG&E; local government and other partnerships (LGPs), and third party (3-P) implementers. PG&E filed and received approval of its new, innovative approach from the CPUC. PG&E’s current 2006 – 2008 energy efficiency program portfolio is summarized in Exhibit 1.

1.2 PG&E views its competitively-bid 3-P programs as valuable and important in achieving the state’s Energy Action Plan goals, and as integral to its procurement portfolio. PG&E issued a solicitation for competitively-bid 3-P energy efficiency programs on September 23, 2005. This solicitation sought programs for all markets in PG&E’s portfolio except non-resource programs and programs that duplicate PG&E’s statewide consistent Mass Market programs. Through this solicitation, PG&E selected 27 programs covering all market sectors, some of which overlapped with PG&E’s existing programs. PG&E is currently in the process of finalizing and executing the contracts resulting from this solicitation.

1.3 This solicitation is the second solicitation for competitively-bid third party

programs that will be part of PG&E’s PY2006 – 2008 energy efficiency portfolio. In this solicitation, PG&E is seeking proposals in the following two program categories: Innovative and Targeted. Each type of program will be evaluated by different evaluation criteria, as set forth in Exhibit 4: Bid Evaluation Criteria. Bidders are required to identify their program as either Innovative or Targeted.

1.4 PG&E reserves the right to evaluate programs using criteria for a program

category (such as Innovative) that Bidder selects as well as criteria from the other program category (such as Targeted).

1.5 Program Categories

Through this solicitation, PG&E is soliciting programs in the following program categories:

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Innovative Proposals Eligible proposals in this category are: any new technology, marketing

approach or customer segment not already offered or served in PG&E’s 2006 – 2008 EE portfolio by any delivery channel (IOU, LGP, 3-P). Bidder may bid new technologies if bidder can demonstrate that technology is commercially available and performance issues have been investigated and resolved.

Targeted Proposals Eligible proposals in this category include proposals that target markets

and technologies listed in Exhibit 2. PG&E has identified specific targeted markets in which it seeks proposals, as well as specific technologies or approaches that PG&E seeks in all market segments, which are identified as “cross-cutting” proposals. In the list below, some technologies are listed both under a particular market segment as well as under the “cross-cutting” proposals which indicates that the technology is of particular interest for the identified market segment but also of interest in all market sectors.

1.6 Goals for PG&E’s PY2006 – 2008 Energy Efficiency Portfolio - Solicitation

Objectives PG&E’s goals for its PY2006 – 2008 Energy Efficiency (EE) Portfolio are listed below. PG&E seeks programs that are designed and implemented by third parties to help achieve its EE portfolio objectives, which are:

1.6.1 to achieve California’s policy objective of providing reliable,

reasonably priced resources that are cost-effective and environmentally sound,

1.6.2 to meet PG&E’s resource procurement needs (kW, kWh, therms)

through energy efficiency, and

1.6.3 to achieve high customer satisfaction in order to increase both customer participation and energy efficiency program and technology market penetration.

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PG&E is a charter member of the California Climate Action Registry, a non-profit public/private partnership that serves as a voluntary greenhouse gas (GHG) Registry to protect, encourage, and promote early actions to reduce GHG emissions. PG&E encourages all successful Bidders to join the Registry, and will provide training to successful Bidders to help them educate program participants about the Registry and the benefits of participation

1.7 PY2006 – 2008 Portfolio Areas for Bidding

1.7.1 In this solicitation, PG&E is seeking proposals for select parts of its portfolio, as described in Exhibit 2. Please note that Exhibit 2 also contains specific guidelines for Retro-Commissioning proposals that Bidder’s should review if they are proposing a Retro-Commissioning program.

PG&E does not seek programs identified below:

(1) non-resource programs – programs that do not produce measurable energy savings (such as education and outreach programs);

(2) Programs that duplicate PG&E’s proposed PY2006 - 2008 Mass Market statewide-consistent program delivery strategies, including: a. Incentive programs with CFL manufacturers/distributors/

retailers b. Upstream incentive program with manufacturers and

distributors for HVAC and Motors programs c. Appliance recycling programs d. Midstream point-of-sale rebate programs with big box (e.g.

Home Depot, Lowes, Sears) and independent (e.g. Western Appliance, ACE Hardware) lighting or appliance retailers. However, bidders may submit proposals for showrooms and distributors that focus on large vendors and distributors for commercial markets that focus on non CFL measures

e. Low wattage T-8 lights f. LED refrigerated case lights

1.7.2 PG&E has defined the following market segments: Mass Market; Agricultural and Food Processing; Schools, Colleges and Universities; Retail; Heavy Industrial; Medical; Large Commercial and Institutional; Hospitality; Residential New Construction and High Technology. Exhibit 11 contains more information about how PG&E defines each market. Bidders’ proposals may cover multiple targeted market areas.

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1.8 Program Coordination

1.8.1 Coordinating Programs in the PY2006 – 2008 Portfolio PG&E seeks to offer an integrated portfolio of programs so customers have a range of options to choose from and can pick energy efficiency offerings that best meet their wants and needs. The goals of program coordination are to:

(a) Achieve the Commission’s energy savings goals (b) Support all program implementers to achieve a “level playing

field” so all program implementers are given an equal chance of success

(c) Avoid creating lost opportunities or new market barriers that will make it later difficult to capture all economic energy efficiency potential in a market

(d) Maximize customer satisfaction by offering customers a wide range of Integrated Demand Side Management (IDSM) opportunities, educating customers about all options for which they are eligible, and helping customers assess which IDSM options will best meet their wants and needs.

1.8.2 All programs selected for the 2006 – 2008 portfolio will need to be

coordinated with other programs in the portfolio. Some programs may cover the same markets, measures, and customer types. PG&E will consult with implementers whose programs overlap or otherwise require coordination, and determine appropriate coordination requirements for each selected program. The two basic coordination models that PG&E uses to develop coordination requirements are: Customer Choice – typically for large, sophisticated customers, customer can choose among complementary or alternative offerings available from multiple parties. Only programs that can co-exist productively will be offered together to customers under the “Customer Choice” model. “Franchises” – granted when “Customer Choice” model is not practicable, for example, with some smaller, less sophisticated customers, when multiple program offerings may result in customer confusion or program could be operated more cost-effectively through a single service provider. Exclusive franchises could be based on, for example, geographic area, customer segments, end-uses and/or measures, customized customer lists in specific market niches, customer characteristics such as customer size, building type or specialized process.

1.8.3 PG&E’s 2006 – 2008 Energy Efficiency Portfolio achieves savings through three channels: PG&E-designed and delivered programs, partnership programs, including Local Government Partnerships (LGPs), and Third Party (3-P) designed and delivered programs.

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Exhibit 1 provides summary information on PG&E’s current 2006 – 2008 portfolio, including a list of programs (PG&E, LGP and 3-P); program abstracts, budgets, savings, markets and end uses covered by the program. Bidders will be expected to review Exhibit 1, and identify any existing programs that cover the same or similar customers with the same or similar end uses in the same geographic area. Bidder will also need to describe how the proposed program can be coordinated with programs already in the 2006 – 2008 portfolio that target the same customers with the same or similar end uses. Please note that PG&E is in the process of negotiating 3-P contracts from the previous solicitation. Therefore, the final list of programs and measures may differ from those contained in Exhibit 1.

1.9 Integrated Demand Side Management

1.9.1 This solicitation seeks proposals for energy efficiency programs. PG&E will also be offering its customers a suite of other demand-side options, including conservation, demand response and self-generation. PG&E will integrate all demand-side programs to ensure selected programs deliver maximum benefits, then educate and encourage customers to choose one or more demand-side options that meet their energy needs. While PG&E seeks energy efficiency program proposals, proposals may include integrated demand-side elements. PG&E will consider these elements as they review the proposals for comprehensiveness and portfolio fit.

1.10 PG&E’s Long-Term Vision for Competitively-Bid Programs

1.10.1 PG&E believes third party designed and implemented competitively-bid programs are an essential part of PG&E’s energy efficiency portfolio. Because third parties may have market knowledge, expertise and relationships that PG&E does not possess, they may increase the reach and penetration of their energy efficiency programs. In addition, third parties may be able to offer technologies or reach certain customers more effectively than PG&E. Finally, third parties may have innovative ideas and program concepts.

1.10.2 PG&E looks forward to selecting programs and working with the

successful Bidders. We seek to identify and select implementers that can demonstrate they have a track record of producing savings, will produce the savings they propose, and will work cooperatively with other selected implementers to help maximize portfolio savings.

1.10.3 In the short term, PG&E will seek to select programs and teams

that PG&E has high confidence can yield the contracted-for savings. Over time, if third party programs demonstrate that they are indeed faster, better, or more cost-effective in serving customer

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needs than a corresponding utility alternative, PG&E expects to allocate a greater percentage of its energy efficiency portfolio funding to those successful third party designed and implemented programs. At the same time, programs that prove to be less cost-effective or fail to deliver faster and better energy savings may have their budgets reduced.

1.11 Portfolio Administration

1.11.1 PG&E will be administering a portfolio of programs to achieve its resource procurement objectives, customer satisfaction goals, and Energy Action Plan objectives. PG&E will require all programs, including its own, and those designed and implemented by third parties and by local government partnerships, to submit monthly energy savings and spending reports. Additionally, a quarterly “scorecard” describing how the programs are performing compared to forecast and how they are meeting program quality objectives will be required. PG&E will consider how all programs are performing as it evaluates whether to shift funding across programs over time. In addition, PG&E may shift funds away from programs that are meeting goal to other programs to better achieve portfolio objectives.

1.11.2 The program metrics that PG&E will require all implementers to

report, and considerations PG&E will use in deciding whether to shift funds from one program to another, are contained in Exhibit 9: Program Metrics. As PG&E gains more experience administering the portfolio, it may modify the program metrics and program coordination requirements to better achieve its portfolio goals.

1.12 Conditional RFP

PARTIES WHO RESPOND TO THIS SOLICITATION ASSUME FULL RISK, WITH NO RECOURSE TO PG&E, THAT COMMISSION ACTION OR INACTION MAY RESULT IN PG&E AMENDMENTS TO THIS SOLICITATION, OR MAY DELAY OR PREVENT PG&E FROM EXECUTING CONTRACTS RESULTING FROM THIS SOLICITATION. 1.12.1 Solicitation Process: Advisory Group Input

(a) This solicitation, including the resulting proposal evaluation and program negotiations, has involved and will continue to involve input and oversight from two advisory committees and the public at various times during the process, as described below. The purpose of the input is to ensure that the solicitations, evaluation criteria and process will help PG&E achieve the state’s Energy Action Plan and resource procurement objectives, as well as ensure the solicitation process is consistent with CPUC objectives.

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(b) The two advisory committees are the “Program Advisory Group” (“PAG”) and the “Peer Review Group” (“PRG”). The PAG consists of market and non-market participants across the full spectrum of program areas and strategies. The PRG, a subset of the PAG, consists only of non-financially interested participants1. A key purpose of the PRG is to ensure against potential bias in program selection.

(c) PG&E’s PAG and the public provided input on this

solicitation and bid evaluation criteria.

(d) In addition to providing input on the RFP and bid evaluation criteria, PRG members will receive a summary of the proposals received and regular updates on PG&E’s proposal evaluation process to ensure the bid evaluation criteria are applied fairly and consistently. PRG members who sign a non-disclosure agreement or are subject to other state imposed confidentiality provisions will be eligible to review individual bids and PG&E’s evaluation of the bids upon request. In addition, PG&E will provide the PRG with regular opportunities to be apprised of and provide input on the proposal evaluation and selection process, to ensure an open and transparent solicitation and selection process consistent with the CPUC’s objectives.

(e) In addition, PG&E reserves the right to share bids and its bid

evaluations with staff from other California IOUs if a Bidder proposes to offer its program in more than one IOU service territory

1.12.2 Solicitation Process: Two Stage Proposal and Evaluation Process

(a) Two Stage Evaluation Process: Proposals in this solicitation will be submitted in two stages.

(b) Proposal Evaluators: Each proposal will be evaluated and

scored by at least two evaluators. However, in some cases, more than two evaluators will be involved in scoring a proposal.

1 A financially interested party is any person who engages in the purchase, sale, or

marketing of energy efficiency products or services, or who is employed by a private, municipal, state or federal entity that engages in the purchase, sale, or marketing of energy efficiency products or services. Energy efficiency services include, among other things, performing energy audits and advising clients and potential customers about potential energy savings they can achieve, but does not include evaluating, measuring and verifying the installation and/or results of energy efficiency products or service, or research to develop new energy efficiency products or services. See D. 01-08-028, mimeo, p. 91.

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(c) Bid Evaluation Process: PG&E will use the Bid Evaluation Criteria in Exhibit 4 to evaluate and rank proposals. The California Public Utilities Commission approved the bid evaluation criteria PG&E will use. The bid evaluation criteria differ depending on the program category (innovative and targeted). PG&E will evaluate programs using the bid evaluation criteria from the program category identified by the Bidder. In addition, PG&E may also evaluate a program using bid evaluation criteria from another program category.

During the evaluation process, PG&E will compare programs

to other programs in the same market segment. Depending on the quality of the bids, PG&E expects to select one or more proposals in each market segment depending on the relative bid evaluation scores of proposals in a particular market segment. However, PG&E reserves the right not to fund any proposals in a particular market segment if PG&E is not satisfied with the quality or nature of the proposals submitted in the market segment. Proposals that are “cross cutting” or cut across multiple markets will be compared to other proposals in the market in which the cross-cutting program will predominantly operate.

(d) Questions During Bid Evaluations: PG&E reserves the right

to ask individual Bidders specific questions to help clarify the proposal. PG&E may not ask all Bidders questions. In response to PG&E’s questions during the evaluation phase, Bidders may clarify but not modify their proposals.

(e) Portfolio Integration: After PG&E selects bids based on

numeric scores resulting from the bid evaluation process, PG&E may also elect to fund programs that received lower scores as “wild card” selections based on PG&E’s portfolio needs. The factors PG&E will consider in selecting a “wild card” proposal during portfolio integration are overall portfolio cost-effectiveness and levelized costs, individual program cost-effectiveness and levelized costs, % of funding allocated to each market segment and rate class, geographic areas covered by each program, whether the proposal addresses constrained areas, market segments covered by each program, total market potential vs. percent savings forecast for each market segment, portfolio comprehensiveness including coverage of market segments, measure mix and/or end uses, complementary program offerings and/or extent of overlap and duplication of programs and level of coordination required to successfully implement the proposal.

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1.12.3 Solicitation Process: Program and Contract Negotiations (a) PRG Review: After PG&E completes the bid evaluation

process, PG&E will seek review and input of its process and selections from its PRG.

(b) Finalizing Program Details: After PRG review of the bid

evaluation process, PG&E will work with the selected Bidders to finalize program details. This process may include negotiating the following elements of the Bidder’s proposed program: (1) exceptions to the General Conditions, (2) underlying energy savings assumptions – final energy

savings assumptions will be in PG&E’s sole discretion, (3) the geographic territory in which the Bidder’s program

will operate, (4) Program coordination model, and customers that the

program will serve, (5) program budget.

In addition, through contract negotiations, PG&E may

request that Bidder eliminate one or more proposed tasks if PG&E does not believe the task(s) add value to the program goals. PG&E may also work with Bidder to provide additional detail or specificity in the scope of work.

(c) Suspending Program Negotiations: During program

negotiations, PG&E reserves the right to suspend contract negotiations with any Bidder for any reason. Factors that PG&E may consider in assessing whether to suspend contract negotiations include, but are not limited to: (1) PG&E and the Bidder are unable to agree on contract terms and conditions within a reasonable period of time, within PG&E’s sole discretion; (2) Bidder did not disclose all program costs (either to PG&E or the customer) during bidding, (3) Bidder discloses details about the program during program negotiations that were not previously disclosed during the proposal process that in PG&E’s judgment could adversely impact program feasibility or success, and (4) PG&E determines that Bidder’s proposed savings estimates or other input assumptions must be significantly modified after PG&E selects the proposal during the course of finalizing program details.

If PG&E ceases negotiations with one or more Bidders, PG&E may initiate negotiations with other Bidders that were not selected for initial negotiations.

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(d) Post Bid Evaluation De-Brief: PG&E encourages Bidders (both successful and unsuccessful) to meet with PG&E to discuss PG&E’s evaluation of Bidder’s proposal. For this solicitation, PG&E’s debrief of unsuccessful Bidders will occur only after PG&E completes contract negotiations and contract execution with the successful Bidders.

1.12.4 Solicitation Process: Contract Package

Contracts resulting from this solicitation will contain several elements:

(a) General Conditions (GCs): (See Exhibit 5.) PG&E’s GCs may vary depending on the nature of the program. Bidder may request exceptions to terms in the GCs in response to Attachment 6.

(b) Specific Conditions: The specific conditions will include

Bidder’s scope of work as well as PG&E-drafted specific conditions, as applicable to Bidder’s program. PG&E-drafted specific conditions are set forth in Exhibit 6.

(c) Avoided Cost Calculator: The input and output sheets from

the avoided cost calculator will be an Attachment to the contract.

(d) Coordination Plan: The geographic areas, customers and

measures that Bidder is allowed to serve and install will be attached to the contract. A more detailed coordination plan setting forth how Bidder’s program will coordinate and leverage with other programs will be developed after the contract is executed.

1.12.5 Solicitation Process: CPUC Compliance Filing

PG&E expects to file the selected programs with the Commission, subject to further discussion and inquiry at the Commission. If the CPUC does need to approve the programs, the resulting contracts will be effective only upon Commission approval of the programs. If the Commission makes material changes to the filed programs, and program plans are unacceptable to either Bidder or PG&E, either Bidder or PG&E, without liability or recourse to the other, may decide not to execute the contract.

1.12.6 Solicitation Schedule PG&E expects to conduct the solicitation according to the following schedule. PG&E reserves the right to make changes to the schedule, and will notify registered Bidders or selected Bidders (once Bidders are selected) of any schedule changes:

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Solicitation Schedule

Date Activity Wednesday, June 28, 2006 RFP Issued Friday, July 7 Bidder Training – Stage I

(PG&E Avoided Cost Calculator, DEER, Customer Data)

Friday, July 7 Questions on Stage I RFP requirements due to PG&E

Wednesday, July 12 Mandatory registration must be complete

Monday, July 17, no later than 11:00 am PDT

Stage I Proposals due

Monday, August 7 PG&E meets with PRG to discuss bids

Monday, August 7 Notify Bidders of Stage II eligibility

Friday, August 11 Bidder Training – Stage II (PG&E Avoided Cost Calculator, DEER, Customer Data)

Friday, August 11 Questions on Stage II RFP requirements due to PG&E

Monday, August 28, no later than 11:00 am PDT

Stage II bids due

Friday, September 15 Tentative notification of Bidders

Friday, September 15 Preliminary negotiations beginWednesday, September 27 PG&E meetings with PRG to

discuss bids Wednesday, September 27 Bidders formally notified of

selection Tuesday, October 10 Complete negotiation of key

terms Tuesday, October 17 Contract negotiations end;

final scopes to PG&E Friday, October 27 Contract reviews completed November 2006 Contract execution

1.12.7 Solicitation Training

PG&E will host a Bidder training session on two dates: July 7 and August 11 at the Pacific Energy Center, 851 Howard Street, San Francisco. The session will begin at 10:00 am and end no later than 3:00 pm. PG&E will webcast the training and have a call-in number for those who are unable to attend in person. Interested

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Bidders should check the website for details closer to the date of the training. During the session, Bidders will receive training on the use of the PG&E Avoided Cost Calculator, the DEER Database, and PG&E’s market segmentation. Attendance at one or both sessions is voluntary. Since Bidders may ask different questions in each session, the material PG&E discusses in each session may vary. A Question and Answer period will follow each presentation. There will NOT be an opportunity to ask general questions about this solicitation during this training. The agenda for training will be available at: www.pge.com/3PEnergyEfficiencyRFP. A call-in number will be available on the agenda.

1.12.8 Mandatory Bidder Registration BIDDERS WHO MAY RESPOND TO THIS SOLICITATION ARE REQUIRED TO REGISTER WITH PG&E BY PROVIDING CONTACT INFORMATION ( E.G., E-MAIL ADDRESS) TO RECEIVE UPDATES, MODIFICATIONS, RESPONSES TO QUESTIONS AND ANSWERS, ADDITIONAL INSTRUCTIONS, AND/OR OTHER ANNOUNCEMENTS REGARDING THIS SOLICITATION. BIDDERS ARE SOLELY RESPONSIBLE FOR MONITORING PG&E WEBSITE FOR ANY ANNOUNCEMENTS THAT MAY BE POSTED DURING THE SOLICITATION. PG&E IS NOT RESPONSIBLE FOR BIDDER’S FAILURE TO COMPLY WITH INSTRUCTIONS AND OTHER INFORMATION POSTED ON ITS WEBSITE, To register your intention to submit a response to this solicitation, send an e-mail to PG&E at [email protected]. Please include the words “RFP Registration” in the subject line and the following information in the body of the e-mail message: firm name, contact name, mailing address, phone number, FAX number and e-mail address. Bidders are responsible for ensuring that PG&E receives your registration. Bidders may track receipt of their registration message by requesting an automatic read receipt notification from their e-mail system when the message is read. Bidders must register no later than Wednesday, July 12, 2006.

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2.0 DEFINITIONS2

Bidders should review Exhibit 6 for definitions. In addition:

Program Yield: The Program Administrator Cost (PAC) $/kWh and $/therm on a levelized cost basis generated using the PG&E Avoided Cost Calculator.

3.0 PROGRAM AND BIDDER ELIGIBILITY REQUIREMENTS

Proposed programs and Bidders must, in PG&E’s sole judgment, meet the following requirements.

3.1 Proposed Program Requirements

3.1.1 Proposed programs must deliver measurable energy savings, for example through permanent hardware retrofits, modifications, upgrades, operational changes, or design improvements. Information-only and education-only programs are not eligible for this solicitation.

3.1.2 Proposed programs must be for Energy Efficiency. The following

programs are not eligible:

(a) Generation, including distributed generation or self-generation, photovoltaics, back-up generation, and co-generation.

(b) Energy conservation programs that rely only on behavioral changes.

(c) Fuel substitution programs, unless they pass the Dual Test and pass the three-prong test as described in the Commission’s Energy Efficiency Policy Manual, Version 3.

(d) Solar water heating, unless it is cost-effective on a stand-alone basis, i.e., it passes the Dual Test of cost-effectiveness.

(e) New tool or Energy Efficiency Measure development, or completion or testing of new tool or Energy Efficiency Measure development. This solicitation is not intended to fund Research and Development.

(f) Programs that exclusively target low-income customers. (g) “Pure” load management programs that do not produce

energy savings. However, PG&E will consider proposals which combine energy efficiency and load management.

2 Most of the definitions in this section are from the Commission’s Energy Efficiency

Policy Manual, Version 3, as adopted in Decision 05-04-051 dated April 21, 2005. See Exhibit 6, PG&E Specific Conditions, for additional definitions.

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3.1.3 Proposed programs may only serve PG&E electric and/or gas customers. Only customers who pay the Public Goods Charge (PGC) through their electric rates or the Gas Surcharge through their natural gas rates are eligible to participate in energy efficiency programs. Where a community elects to become a Community Choice Aggregator (CCA) as permitted under AB 117, PG&E will determine continued customer eligibility within that community based on the distribution of PGC funds collected.

3.1.4 Eligible programs may only serve self-generation customers under

the following conditions: self-generation customers may not receive incentives for energy savings that exceed the annual energy usage by the customer purchased from PG&E. The annual energy usage shall be determined by averaging the past twelve (12) months of customer energy usage determined at the time the customer submits at program application or customer contract, whichever comes first. NOTE: PG&E reserves the right to modify policies regarding incentive payments and program eligibility for self-generation customers.

3.1.5 All programs must be cost-effective using the Dual Test.

3.2 Bidder Eligibility

3.2.1 PG&E expects that Bidders will be consultants, engineers, contractors, or other energy efficiency market actors that have proposed and implemented cost-effective energy efficiency programs in the past and have the knowledge and expertise to deliver the proposed programs. PG&E also encourages property managers and developers to respond to this solicitation. Local governments are not eligible to apply to this solicitation. Proposed programs must not be sponsored by California utilities or utility affiliates. Partnerships which include California utility partners affiliates are not eligible for this solicitation.

3.2.2 Bidders must also demonstrate the following to be eligible:

(a) That they have the licenses required by law to complete the work;

(b) That they have requisite financial stability necessary to complete the work. A Bidder must have sufficient financial strength to implement the proposal and to remit monies paid by PG&E if the program savings (as measured by the approved installation verification plan) are less than the Bidder’s contracted savings.

(c) That they are not involved in CPUC sponsored EM&V studies that will be used to:

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(1) measure and verify energy and peak load savings for individual programs, groups of programs and at the portfolio level

(2) generate the data for savings estimates and cost-effectiveness inputs

(3) measure and evaluate the achievements of energy efficiency programs, groups of programs and/or the portfolio in terms of the “performance basis” established under Commission-adopted EM&V protocols

(4) evaluate whether programs or portfolio goals are met. (5) perform the types of EM&V studies in (1) through (4)

above – either as a non-IOU program implementer or subcontractor to an IOU implementer –for at least six months after the implementer’s program delivery contract expires.

4.0 BUDGET AND PAYMENT

4.1 Budget Available for Solicitation PG&E expects to contract for approximately $69 million for competitively-bid programs through this solicitation. However, PG&E reserves the right to contract for more or fewer budget dollars, depending on the responses it receives.

4.2 Expected Program Yields

Bidder should consult Exhibit 3 for the expected program yields in terms of PAC levelized cost ($/kWh or $/therm) for the target markets they propose to address. Bidders may propose program yields that are costlier than the yield PG&E expects from the target market. However, a Bidder’s proposal is likely to have a greater chance of success if the proposed program yield is equal to or better (i.e. lower PAC levelized cost, $/kWh or $/therm) than PG&E’s expected program yields for the target market. The portfolio and market segment yields are contained in Exhibit 3.

If Bidder’s proposed program yield is costlier than the expected market segment yield, PG&E recommends that Bidder explain in the “Supplemental Information” section why the program will help achieve the Commission’s and PG&E’s energy efficiency portfolio objectives despite higher costs. For example, Bidder’s program may be able to produce greater penetration, be more comprehensive than other alternatives, or address a measure that is more costly to deliver than other measures for that segment. If Bidder proposes to target more than one Targeted Market Segment, Bidder shall identify the portion of the budget and energy savings (kW, kWh, and therms) allocated to each segment in its proposal. In addition, Bidder shall designate a primary market segment in the Avoided Cost

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Calculator (See Attachment 1). If applicable, Bidder may designate a secondary market segment in the Calculator. Bidders planning to submit proposals for small commercial customers (typically customers served on electric rate schedules A1 and A6 and/or gas rate schedule GNR1) that cut across several targeted markets are not required to submit separate budgets and savings forecasts for each segment (see Exhibit 11 for market segment definitions). Bidders may designate these proposals as “Mass Market” proposals.

4.3 Budget Minimum and Maximum

Innovation proposals must be at least $500,000 and may not exceed $3,000,000. Targeted Market Proposals must be at least $4,000,000 and may not exceed $12,000,000. For the “Retro-Commissioning” portion of the budget, PG&E seeks proposals with estimated budgets of $10,000,000. All proposals must contain a discussion indicating if Bidder can scale the proposal, and how costs and savings would change if PG&E awards Bidder more or less than the requested budget amount. Furthermore, as described above, the program budget may increase or decrease over time, depending on customer demand for the program and other factors. If PG&E decides to award an amount different than the requested contract amount, PG&E and Bidder will negotiate savings and budget for modified contract amount.

In Bidder’s budget proposal, Bidder must state the budget range for which the program yield will be the same. For example, if Bidder proposes a program budget of $2,000,000 with a PAC levelized cost of 10 cents/kWh, Bidder will be expected to state the budget range where the program yield will still be 10 cents/kWh if PG&E scales the budget up or down. Additionally, the Bidder may provide various program yields for budgets outside the range of the base request in the proposal.

4.4 Budget Forecast

4.4.1 Program Development Costs: These are incurred before program launch. They include, but are not limited to: program material development, staff time to develop program details, initial program marketing and outreach. Bidder should separately list each program development activity and a not-to-exceed amount for that activity. For program development costs, Bidder may request payment on a time-and-materials basis (using fully-loaded labor costs) up to the not-to-exceed amount for that activity.

4.4.2 Program Implementation Costs: These costs are incurred after

program launch. Program Implementation Costs will be paid on a unit price basis by kWh savings achieved, and shall include installation, administration, marketing/outreach costs, and other implementation costs. Bidder shall propose the unit prices by savings achieved.

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4.4.2.1 If Bidder seeks to recover Program Implementation

Costs before it can produce savings, Bidder should provide description of why it seeks to recover Program Implementation Costs before savings are delivered, and propose a payment structure.

4.4.2.2 The bulk of Bidder’s costs shall be Program

Implementation Costs.

4.4.3 PG&E shall not consider contract payment structures that are largely or exclusively time-and-materials based.

4.5 Budget Modification After Contract Execution

4.5.1 PG&E reserves the right to increase or decrease the budget based on the program’s success in meeting forecast savings goals, program metrics and how the program performs compared to alternative programs. Thus, if the program is more successful than forecast, PG&E may, with Bidder’s consent, increase the budget and savings forecast. PG&E may consider a program to be “less successful than forecast” if the program does not deliver monthly savings forecasted or if the program does not achieve other program quality metrics, such as rebate or contractor payment turn-around times and customer satisfaction metrics. If the program is less successful than forecast or is less successful than other alternative programs, then PG&E reserves the right, at its sole discretion, to reduce the contract budget and savings or terminate the contract.

4.6 Payment

4.6.1 PG&E will pay for Program Development Costs on a time-and-materials basis, if any and as agreed to, with not-to-exceed amounts, according to the terms of the attached General Conditions, and Program Implementation Costs on a unit price basis, by savings achieved or by an alternate payment structure proposed by Bidder and agreed-to by PG&E during contract negotiation.

4.6.2 All payments shall be dependent upon satisfactory completion of

tasks or achievement of goals, as demonstrated by deliverables submitted by program implementer and subject to verification and approval by PG&E. Satisfactory completion means that the deliverables are completed to the satisfaction of the IOU Contract Manager. In addition, if PG&E, at its sole discretion, determines through its installation verification process that measures reported were not installed or are not present at the time of verification, Bidder shall refund to PG&E any payment that Bidder has already received for the missing measures.

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4.6.3 After contract execution, the CPUC may review program

performance. Should the CPUC determine by decision or ruling that a refund is due and seek to recover such Program costs from Implementer, Implementer will be required to return the amount due to PG&E within thirty (30) calendar days of the date Program Implementer receives written notice that the payment is owed.

4.6.4 By CPUC order, PG&E is expected to update energy savings

forecasts with new avoided cost, peak definition and DEER/EUL as they become available. Successful bidders will be required to use these new figures in all reports submitted subsequent to these updates. This requirement, however, will not affect the agreed-upon payment terms. Also, PG&E will continue to pay based on actual installations using the agreed-upon ex-ante savings estimates or calculation methodologies. The CPUCs reporting requirements may change during program implementation, and all Bidders will be expected to abide by them.

4.7 Commission Budget and Program Workbook

Bidders who have successfully completed program negotiations with PG&E must meet all Commission reporting requirements. The Commission may modify or update the reporting requirements from time to time. Bidders should review the Commission reporting requirements and include any estimated regulatory reporting costs in Bidder’s cost proposal.

5.0 RFP PROCEDURE 5.1 CONTACT PROCEDURE

All correspondence or contact with PG&E, including questions about this RFP, shall be submitted in writing through email to PG&E’s official contact email address of “[email protected]”. No interpretation, revision, or other communication regarding this RFP is valid unless received in writing at PG&E’s official contact email address.

5.2 QUESTIONS AND CLARIFICATIONS

All questions regarding Stage I of this RFP must be submitted in writing to the PG&E official contact email address of “[email protected]” no later than Friday, July 7, 2006. All questions regarding Stage II of this RFP must be submitted in writing to the PG&E official contact email address of “[email protected]” no later than Friday, August 11, 2006. PG&E will post answers to Bidders’ questions on PG&E’s website at www.pge.com/3PEnergyEfficiencyRFP.

Note to all Bidders: No telephone inquiries or faxed questions will be accepted.

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PG&E will post answers to all questions submitted by Bidders according to the procedures described in this section, and which are received by PG&E prior to the deadlines in Section 5.2, above. Questions submitted after this time will not be accepted.

5.3 ERRORS OR OMISSIONS IN PROPOSAL PACKAGES

A Bidder that discovers an error or omission in its proposal package may withdraw that proposal package and resubmit, provided that it does so before the close of the solicitation period as specified above.

5.4 VERIFICATION OF RECEIPT OF PROPOSAL PACKAGE

It is the Bidder’s sole responsibility to ensure that its proposal package is received by PG&E at the designated proposal delivery address by the close of the solicitation period as specified in this RFP. Bids that are delivered to a different PG&E location will not be accepted. Proof of timely delivery (e.g., return receipt for certified, registered or overnight mail) must be obtained by the Bidder for each proposal package submitted.

5.5 PROPOSALS NOT CONFIDENTIAL

PG&E will not keep either the proposals responding to this RFP nor any contracts entered into as part of this solicitation confidential, except for certain pricing information (unit prices, labor rates, Bidder financial information). However, members of the PRG who have signed a confidentiality agreement or are governed by state confidentiality provisions will be permitted to review labor rates or unit prices upon request. Furthermore, PG&E will have no liability to a Bidder or other party as a result of any public disclosure of any proposal or contract.

5.6 PROPOSAL PREPARATION COSTS

PG&E shall not reimburse any Bidder for any cost incurred in the preparation or submission of a proposal package and/or in any negotiations regarding the contract. This RFP does not, in any way, obligate PG&E to award a contract, to pay any costs incurred in the preparation of a proposal to this request, or to procure or contract for services or supplies. This RFP is not a guarantee of work.

5.7 RFP WITHDRAWAL

PG&E reserves the right to withdraw this RFP at any time before executing final contracts with Bidders. PG&E may accept or reject any or all responses, and may accept other than the lowest price proposed. PG&E will not be liable, by reason of such withdrawal or rejection, to any Bidder submitting a proposal in response to this RFP. PG&E may award only part of total program funds.

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6.0 SUBMISSION REQUIREMENTS

Successful Bidders will be required to submit proposals in two stages. The submittal requirements in Section 7.0 below describe what information Bidder must provide in each stage. 6.1 Proposal Form

Bidder shall submit proposals as follows: 6.1.1 Stage I: Bidders must submit the original (double-side and bound)

and TWELVE (12) copies (double-sided and unbound) of each Stage I proposal. Each proposal must be on recycled 8½ x 11 paper.

6.1.2 Stage II: Bidder shall also submit four (4) electronic copies of the

following: (a) PG&E Avoided Cost Calculator (See Attachment 1) file(s)

(Microsoft Excel 2000 or 2003) (b) Bidder’s proposal narrative, in Microsoft Word format.

Each copy should be on a CD in the formats specified above.

6.2 PROPOSAL SUBMISSION AND DELIVERY ADDRESSAll Stage I proposal packages must be delivered to the address below by 11:00 a.m., PDT, on Monday, July 17, 2006. All Stage II proposal packages must be delivered to the address below by 11:00 a.m., PDT, on Monday, August 28, 2006. Faxed or emailed proposals will not be accepted. To ensure fairness, proposals received after this deadline will not be accepted and will be returned unopened. PG&E will date stamp and log in the proposal packages as they are received.

For U.S. Postal Service First Class and Priority Mailing Pacific Gas and Electric Company Supply Chain Attn: Bid Receipt Desk P. O. Box 770000, Mail Code N5D San Francisco, CA 94177 Include Bidder Name, Bid Number and RFP Title For UPS, Hand Delivery and Federal Express: Pacific Gas and Electric Company Supply Chain Attn: Bid Receipt Desk 245 Market Street, Room 541A San Francisco, CA 94105 Telephone: 415-973-8093 Due to the possibility of delays, PG&E recommends an expedited

delivery service.

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7.0 PROPOSAL REQUIREMENTS

The proposal must include: (1) the proposal checklist, and (2) all items required in the proposal checklist, and, (3) be within page limits listed below. Each component of the proposal is discussed below.

7.1 Two-Stage Proposal Process and Proposal Checklist

Two Stage Proposal Process: Successful Bidders will submit proposals in two stages: Stage I and Stage

II. The information Bidders must submit in Stage I is listed in Table 1, below, and the text following the table.

PG&E will judge material submitted in Stage I to determine whether

Bidders are eligible to submit Stage II information, in particular the “Program Abstract”, “Company Information”, “References” and “Experience/Track Record”. Exhibit 4 contains the “Stage I” evaluation criteria that PG&E will use to assess whether Bidder is eligible to move to Stage II.

PG&E seeks to move no greater than 40 – 50 proposals to Stage II. Thus,

PG&E encourages Bidders to be clear, specific and provide support for assertions that relate to criteria set forth in Exhibit 4: Stage I Bid Evaluation Criteria.

In Stage I responses, Bidders are invited, but not required, to provide

supplemental information under the “supplemental information” section. This section contains the completed checklist of items that must be

included in the proposal.

Table 1: Proposal Checklist

Item Page Limit Section/

Page Number

Required in Stage I?

(Y=Yes; N=No)

I. Program Description

A. Program Short Summary Not to exceed

250 words

Y

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B. Program Category Not to exceed

½ page

Y

C. Program Abstract Not to exceed

5 pages

Y

D. Program Barriers Not to exceed

1 page

N

E. Program Solution to Address Barriers

Not to exceed

2 pages

N

F. Program Solution to Address Lost Opportunities

Not to exceed

1 page

N

G. Program Status Not to exceed

1 page

Y

H. Program Implementation Not to exceed

5 pages

N

I. Quality Assurance and Measure Verification Activities

Not to exceed

1 page

N

J. Program Coordination Not to exceed

2 pages

N

K. Innovative Programs (Req’d only for those programs filed in “innovative” program category)

Not to exceed

3 pages

N

L. IDSM Programs Elements Not to exceed

3 pages

N

M. Program Energy Targets N

N. Program Non-Energy Targets N

O. Program Metrics N

P. Program Budget Y

Q. Payment Schedule N

R. Subcontractor Activities N

S. Does Bidder request debrief on PG&E’s evaluation?

Y

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II. Savings and Impact Calculations

A. Is Program Cost-Effective? Y

B. PG&E Avoided Cost Calculator (electronic)

N

C. Printed (Hard Copy) Excerpts from Calculator

N

1. Input Tab N

2. Output Tab N

3. Export Tab N

D. Workpapers / Supporting Documents

N

1. Savings Estimates N

2. Measure List Summary N

3. Other Cost Effectiveness Calculation Input

N

III. Additional Information

A. Company Information Not to exceed

1 page

Y

B. References Not to exceed

1 page

Y

C. Experience/Track Record Not to exceed

5 pages

Y

D. Customer Complaint Resolution

N

E. License, Insurance and Financial Information

1. Affirmative Statement of Proper Licensure, and Insurance

Y

2. Copy of each license N

3. Certificate of Insurance N

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4. Affirmative statement of financial strength

Y

5. Financial Information, including any guarantees

N

F. WMDVBE – Supplier Diversity Form

N

G. Exceptions to the General Terms and Conditions

N

H. Signature Page Y

IV. Supplemental Information Not to exceed

10 pages

Bidder Choice

7.2 Item I Program Description

A. Program Short Summary (not to exceed 250 words) Bidder’s brief description of programs scope and objectives (not to exceed 250 words). Describe market segments, end uses and geographic area that the program will serve. NOTE: PG&E will use this short summary to brief its Peer Review Group and PG&E management about proposals that PG&E is considering for selection.

B. Program Category (not to exceed ½ page)

Bidder shall identify which program category it seeks to have program evaluated under: Innovative or Targeted. At its sole discretion, PG&E may evaluate bids under the other category in addition to the program category that Bidder selects.

C. Program Abstract (not to exceed 5 pages) In the Program Abstract, PG&E expects Bidders to address each of the issues listed below. Bidders are invited, but not required, to provide additional detail and support in “Supplemental Information” below. Issues that Bidder must address in the Program Abstract:

• What market segments (as defined by PG&E, see Exhibit 11) will program cover?

• What customer types will program target? • List program end uses

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• Briefly describe market barriers and program strategies for overcoming

• Describe key program elements e.g. will program contain benchmarking, audits, technical assistance, design advice, direct installation, program rebates, etc.

• Describe key program strategies for identifying eligible customers and gaining customer commitment to proceed with comprehensive, cost-effective energy efficiency projects that will produce persistent savings.

• Describe how implementer will recruit and oversee contractors who will work on customer sites to perform any task, including technical assistance, audits, and installations. NOTE: Implementers shall not charge contractors any program fees for participating in program, including training fees or fees for materials and supplies.

D. Program Barriers (not to exceed 2 pages) Describe problems and/or challenges (i.e. market failure, etc.) that program is attempting to address.

• (For example: Commercial building owners are reluctant to re-commission their buildings because of long payback, lack of knowledge, split incentives)

E. Program Solution to Address Barriers (not to exceed 2 pages) Describe how the program will address program barriers. Why is this program being advanced instead of other program approaches? What is the potential of this program compared to other program opportunities?

• (For example: There is a large untapped potential in commercial building retro-commissioning. Because of owner reluctance, the program will provide a package of educational materials to familiarize the owner with the benefits of commissioning)

F. Program Solution to Address Lost Opportunities (not to exceed 1 page) Describe how program expects to minimize lost opportunities.

• (For example: Provide no cost initial audits and vouchers for retro-commissioning projects to cover half of the retro-commissioning cost or $50,000 dollars, whichever is less. Provide free training to building operators.)

G. Program Status (not to exceed 1 page)

State program status (new, existing, modified). A new program is a program that Bidder is not currently, and has not previously, implemented. An existing program is one Bidder is currently implementing, proposed here with no changes. A modified program is a program Bidder is

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currently implementing, proposed with modifications, including, but not limited to, improving cost-effectiveness or process improvements. Bidder must indicate if they are offering or have offered in past five (5) years programs that are the same or similar to proposed programs outside of PG&E’s service territory. If Bidder has operated the same or similar program in the past five years, Bidder must provide all program results to date, including verification and evaluation results, whether performed by an independent EM&V consultant or not.

If Bidder expects it will offer the same or similar program outside PG&E’s service territory, at the same time it is delivering the program in PG&E’s service territory, Bidder must provide following information:

1. If Bidder is offered a contract outside of PG&E’s service territory,

how will budget, savings, and program yield would change? 2. What increased value will program provide or what other benefits

will be created if program is implemented in more than one service territory?

The same or similar programs means targeting the same or similar customers with the same or similar end uses.

H. Program Implementation (not to exceed five pages)

Describe all key program steps from program marketing to end use installation. In particular:

• How will program identify eligible customers, in particular those with the greatest energy savings potential?

• Describe any auditing or benchmarking program components. PG&E prefers program designs that include audits and benchmarking, where robust benchmarking data exists.

• How will program perform marketing and outreach to eligible customers?

o Describe any assistance Bidder requests from PG&E in identifying or enrolling eligible customers. PG&E does not guarantee that it will be able to provide Bidder’s requested assistance in marketing or customer enrollment. However, PG&E will consider Bidder’s request, and discuss with Bidder either during bid clarification or contract negotiation phase of the solicitation. Bidder shall also describe how it will achieve its marketing or customer enrollment objectives if PG&E does not provide the requested assistance.

• How will program contact eligible customers? • How will program analyze what end uses could benefit

customer?

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• What technical or programmatic assistance will program offer customers?

• How will program enroll customers? • How will program work with customer to completed

installations? • How will program pay rebates to customers? • Describe how Implementer will recruit and work with any

contractors who will be working with customers for any aspect of program implementation (program technical assistance, audits, benchmarking, installation)

• How will program monitor and ensure persistence of savings?

I. Quality Assurance and Measure Verification Activities (not to exceed 1 page) Describe program quality assurance and measure verification activities, including:

• Describe procedures for procurement, delivery and installation of equipment.

• List specifications of qualifying equipment (i.e. minimum energy efficiency rating levels).

• Describe installation standards, if applicable. Implementer’s product and installation standards must meet or exceed PG&E’s product and installation standards for similar measures.

• Describe expected quality assurance and measure verification activities.

• Describe how program will track customer and contractor satisfaction and complaints and respond to any complaints.

• NOTE: Successful Bidders will be required to submit a Quality Assurance and Measure Verification Plan – see Exhibit 5, PG&E Drafted Specific Conditions.

J. Program Coordination (not to exceed 2 pages)

In response to this section, Bidders must identify which markets, customers, and end uses overlap with existing 3-P, LGP or IOU programs based on Exhibit 1. In addition, for all programs that overlap with Bidder’s proposed program, Bidder must identify preferred coordination model (customer choice or franchise as described below). Identify which other programs in the current PG&E 2006 – 2008 portfolio will cover the same or similar markets, customers and end uses. See Exhibit 1 to identify which programs cover same or similar markets, customers and end uses. State all areas of overlap. Describe how program proposes to coordinate with same or similar programs offered by

27


other existing delivery channels. Identify whether Bidder’s preferred coordination model is “customer choice” or “franchise.”

Customer Choice – typically for large, sophisticated customers, customer can choose among complementary or alternative offerings available from multiple parties. Only programs that can co-exist productively will be offered together to customers under the “Customer Choice” model. “Franchises” – granted when “Customer Choice” model is not practicable, for example, with some smaller, less sophisticated customers, when multiple program offerings may result in customer confusion or program could be operated more cost-effectively through a single service provider. Exclusive franchises could be based on, for example, geographic area, customer segments, end-uses and/or measures, customized customer lists in specific market niches, customer characteristics such as customer size, building type or specialized process.

K. Innovative Programs (not to exceed 3 pages)

Required only for programs that Bidder submits under the “Innovative” program category.

Describe how the proposal meets the eligibility requirement of “any new technology, marketing approach or customer segment not already offered or served in PG&E’s 2006 – 2008 EE portfolio by any delivery channel (IOU, LGP, 3-P).”

Describe other attributes of the program, technology or approach that make it innovative (new). If Bidder proposes an innovative technology, Bidder must provide evidence that the technology is commercially available and performance issues are investigated and resolved.

L. Integrated Demand Side Management Program Elements (not to exceed 3 pages) (Optional): Include a description of the services and strategies that program would offer that comprehensively deliver IDSM program to eligible customers.

M. Program Energy Targets List the targeted market sector(s) using PG&E-defined market sectors and descriptions, and estimated total net annual savings (kW, kWh, therms) segment.

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Market Sector Market Sector Market Sector kW kWh therms

Describe incentive structure. If incentive amount is not fixed by measure or project, describe how amount is determined for each customer. List geographic area(s), including whether all or part of the program will target customers in an electric transmission constrained area as defined by the California Independent System Operator [http://www.caiso.com/docs/2004/10/04/ 2004100410354511659.html}.

N. Program Non-Energy Targets

Describe specific milestones that are expected to be accomplished by implementing the program strategies.

• (For example: Get 50 building owners each year to agree to audit their buildings; get 25 buildings retro-commissioned per year; enroll, train, and graduate 40 building operators per year).

O. Program Metrics List program’s proposed metrics covering at least the areas listed in Exhibit 9 hereto. Provide a description of how metrics will be tracked.

P. Program Budget Provide proposed budget using the following format: Provide disaggregated costs. Provide the proposed budget as fully-loaded Program Development Costs and Program Implementation Costs, by task. Other Administrative Administrative Overheads and G&A Marketing/Outreach Direct Implementation – Non-incentive Activities Direct Implementation – Incentives and Rebates Direct Implementation – Direct Install Labor Direct Implementation – Direct Install Materials

State budget range where the program yield will remain the same. If desired, Bidder can provide various program yields for budgets outside the range stated in their base proposal.

Q. Payment Schedule

29

http://www.caiso.com/docs/2004/10/04/%202004100410354511659.html


Program Development Costs: List program and development tasks. Provide not-to-exceed (NTE) amounts for each program development task for which Bidder is seeking time-and-materials-based payments.

Program Implementation Costs: Provide unit prices by net kWh savings

achieved and briefly describe all costs used to calculate the unit price. Unit prices shall include implementation, administration and marketing/outreach costs. If Bidder is proposing an alternative payment structure, provide a description of why it seeks to recover Program Implementation costs before savings are delivered, and provide a detailed explanation of the proposed payment structure, including any underlying assumptions.

NOTE: All contracts must have performance-based payments

(payment tied to verified savings). R. Subcontractor Activities Describe what portions of work will be subcontracted out. List subcontractors (to the extent known) and briefly describe what work each will perform. Provide a list of the subcontractor program team members, a brief description of the tasks performed by each member, and an estimate of the percent of the total budget assigned to each entity. If the primary contractor plans to sub-contract more than 50% of the total proposed budget, note the reason for this use of subcontractors. S. Bidder Debrief Request Bidders should indicate whether they would like PG&E to debrief them regarding PG&E’s evaluation of Bidder’s proposal. PG&E encourages both successful and unsuccessful Bidders to be debriefed. PG&E will schedule Bidder debriefs after contracts resulting from this solicitation are executed.

Item II: Savings and Impact Calculations

A. Program Cost-Effectiveness Stage I: Bidder shall include an affirmative statement about whether

proposal is cost-effective using the Avoided Cost Calculator and reasonable energy savings assumptions as described in this RFP. However, in Stage I, Bidder is not required to submit the Avoided Cost calculator or document savings assumptions. If Bidder’s proposed program proves not to be cost-effective in Stage II, Bidder will be eliminated from further consideration.

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B. PG&E Avoided Cost Calculator (See Attachment 1) (electronic) Bidder must use the PG&E Avoided Cost Calculator (Version 3) which

computes the program net present valued cost effectiveness (TRC and PAC) and levelized program costs ($/kWh and $/therm), lifecycle savings, and other impact data using time- and geographically-differentiated avoided costs. PG&E will review the inputs to assess whether they are reasonable and consistent with DEER, the Commission’s Energy Policy Manual, Ver. 3, and inputs that PG&E uses for its own programs. In its bid evaluation, PG&E may recalculate the proposed program’s cost effectiveness using revised input values as PG&E deems appropriate.

Bidder must download the Calculator (Attachment 1) and instructions and other associated files from www.pge.com/3PEnergyEfficiencyRFP.

Bidder must provide four CDs, each with a copy of the completed Calculator.

The Calculator may be updated from time to time by PG&E and/or at the direction of the CPUC. Bidders may be required to use a more recent version of the Calculator if one is developed.

B. Printed (Hard Copy) Excerpts from Calculator File

Provide the following printed (hard-copy) excerpts from the completed calculator:

1. Input Tab 2. Output Tab, first two pages only. Please do not include monthly

savings data 3. Export Tab

C. Workpapers/ Supporting Documents

Provide the following supporting documentation for the savings assumptions used by Bidder in completing the Calculator:

1. Savings Estimates

In a separate attachment to the Calculator, provide a detailed explanation of how Bidder calculated the proposed unit savings (kW, kWh and Therm) for each measure, and any assumptions that it made, or data that it used, to calculate the savings. Bidder must also state the source of any data it uses.

a. In responding to this section, Bidder must use the Database for Energy Efficiency Resources (DEER) first. If Bidder uses measures contained in DEER, Bidder must use the savings values contained in DEER for the measures.

b. If DEER does not contain measure savings, then Bidder’s savings estimates must use recent measurement and evaluation (M&E) studies and provide citations to these studies.

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c. If values are not in DEER, and no recent M&E studies exist, Bidder must rely on actual measured savings, and provide information on how savings were measured.

1. Bidder must describe the measure and explain previous actual savings that have been achieved using the measure, if known.

2. Bidder must also explain how widely the measure is commercially available and currently used in the market

d. As a last resort, Bidder may use engineering calculations. If Bidder must rely on engineering calculations, it must provide the calculations and explain and provide all input values and assumptions used.

If Bidder knows of any reliability or safety issues associated with the measure, it must describe these. Savings assumptions must be described for: - Peak Demand Reduction (kW) - Energy Savings (kWh and therms)

2. Measures List Summary If the Bidder’s program offers an extensive list of measures, summarize

information by measure type or other logical grouping where appropriate. Provide a separate document explaining basis for grouping and document with work papers if necessary. If necessary, provide references to line/row and/or cell numbers in the Calculator. 3. Other Cost-Effectiveness Calculation Assumptions Document and provide a rationale for all cost-effectiveness variables that deviate from those prescribed in the Energy Efficiency Policy Manual, Ver. 3 and the California Energy Commission (CEC) DEER database, including: (1) Net-to-Gross Ratios; (2) Estimated Useful Life, and (3) Incremental

Measure Cost

PG&E may request that Bidder modify proposed costs, savings assumptions or cost-effectiveness inputs. If Bidder declines to make PG&E-requested changes, PG&E may, at its sole discretion, cease further negotiations with Bidder. All final energy savings assumptions are determined at PG&E sole discretion.

Item III. Additional Information

A. Company Information (not to exceed 1 page)

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The Bidder must submit company information using the form provided in Attachment 2. Attach résumés of key personnel who will lead proposed work.

B. References

Stage I: Provide 3 relevant, satisfactory references using the form provided in Attachment 3. Stage II: Provide at least ten relevant, satisfactory references, using the form provided in Attachment 3.

C. Experience and Vendor Track Record (not to exceed 5 pages)

List all Energy Efficiency Programs bidder has implemented, either as

a prime contractor or subcontractor, inside California or outside California, in past 5 years.

For each EE Program in which Bidder was subcontractor, provide

following information: • State program title, budget, where implemented; • Provide reference from prime contractor or primary funding

source; and • Describe role as subcontractor and results of subcontractor

work on program in terms of achieving savings and customer satisfaction. Bidder can also describe results using other measures of success.

For each EE Program in which Bidder was prime contractor, provide

following information: • State program title, budget, where implemented; • Describe results, including savings achieved, budget spent and

cost-effectiveness; • Provide reference from primary funding source; • Did program meet goals within original schedule? If not, provide

explanation; • Did program have budget overruns? If so, provide explanation;

and • List all verification, measurement, process or impact evaluation

studies performed on program, whether by independent evaluation or not.

If PG&E requests any of the studies listed to review, Bidder shall provide studies to PG&E within three (3) business days of PG&E’s request.

D. Customer Complaint Resolution

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Describe procedures for tracking and responding to contractor and customer questions or complaints regarding program, and for resolving program, performance, or product warranty disputes with program participants or customers.

34


E. License, Insurance, and Financial Information

Bidder must submit the following:

1. Affirmative Statement of Proper Licenses and Insurance Stage I:

Bidders shall describe what licenses are required for the work they propose to perform and include an affirmative statement that Bidder has all necessary licenses. Bidder shall include an affirmative statement that it has insurance for the required coverage shown Exhibit 5: PG&E Consulting Services General Conditions. It is the Bidder’s responsibility to clearly identify information to be kept confidential.

2. Copy of each license (that is required).

Stage II: Bidder shall include copies of any and all licenses and/or registrations required for the performance of the proposed work, including those held by subcontractors. Required licenses could include, for example, State of California General Contractors and Electrical Contractors license (C10, and C-20 for HVAC); however, it is the Bidder’s responsibility to determine what licenses are required.

3. Bidder shall provide the certificate of insurance for the required coverage shown Exhibit 5: PG&E Consulting Services General Conditions. NOTE that PG&E will require additional insurance coverage for programs that include components in addition to information, outreach, audits and rebates. Programs that involve design assistance, project management and/or installation will require professional liability insurance in addition to the insurance requirements set forth in the attached General Conditions. Programs that involve equipment removal and/or HVAC installation will require pollution coverage and professional liability insurance in addition to the insurance set forth in the general conditions. 4. Affirmative Statement of Financial Strength

Stage I: Bidder shall provide affirmative statement that it has requisite financial strength to successfully implement program and meet financial obligations.

5. Financial Information

Stage II:

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Bidder shall also provide: • 2-3 years audited financial statements, including balance sheet,

statement of cash flows, and income statement, and • Dunn and Bradstreet number. If vendor cannot provide audited financial statement, they shall provide: • 2-3 years of complete income tax returns. Additionally, vendor shall provide proof of sufficient line of credit to perform the proposed work and proof or guarantee that Bidder will be able to remit payments to PG&E if savings as documented by approved EM&V plan are less than Bidder’s reported savings.

F. WMDVBE3 Supplier Diversity Form Per CPUC General Order 156, Bidders must supply information on its

WMDVBE status and subcontracting plans. PG&E will consider this information in evaluating bids, and will award greater points to vendors who have WMDVBE status, or adequate WMDVBE subcontracting plans that identifies subcontractors with WMDVBE status. Bidders must submit a list of subcontractors (Exhibit 1-A of the GCs) or if, Bidder has not identified specific subcontractors, a statement setting forth the Bidder’s goals for WMDVBE subcontracting. See Attachment 5. The Bidder shall submit its CPUC WMDVBE certification documentation if Bidder claims WMDVBE status. All vendors, regardless of their WMDVBE status, will be eligible to earn the same number of points in this category by identifying subcontractors with WMDVBE status. PG&E will verify CPUC WMDVBE certification of identified subcontractors. PG&E’s supplier diversity program is described in more detail in Exhibit 1 of the General Conditions. Bidders who have WMDVBE status must still submit a WMDVBE subcontracting plan.

G. Exceptions to the General Terms and Conditions

Provide a statement indicating acceptance of PG&E's General Conditions (PG&E GCs or GCs). All contracts must contain PG&E GCs. Bidder’s standard terms and conditions, as well as standardized acknowledgment forms, will not be acceptable.

If Bidder takes exception to any provision in Exhibit 5, PG&E’s GCs,

Bidder must identify it as an “Exception(s) to the General Conditions,” and for each such exception must provide the following information: • details of the exception; • reasons for such exception; and

3 Women, Minority and Disabled Veteran-owned Business Enterprise

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• proposed alternative language (See Attachment 6). Failure to include a statement of acceptance of PG&E’s GCs or

to detail any exceptions to these General Conditions and provide proposed alternative language will cause the Bidder’s proposal to be considered non-responsive.

PG&E reserves the right to eliminate Bidder’s proposal if PG&E and

Bidder cannot reach agreement on any exceptions to PG&E’s GCs. H. Signature Page

Bidder’s authorized representative is required to sign the signature page contained in Attachment 8. PG&E will not enter into a contract with any entity other than the party identified as the Bidder in the proposal package.

Item IV Supplemental Information (not to exceed 10 pages)

In this section, Bidder is invited, but not required, to provide any supplemental information that it thinks PG&E should consider in evaluating Bidder’s proposal. Bidder may wish to address the feasibility of the proposal, describe the strength of its company or team, or why its proposal will be successful in achieving the primary goals of this solicitation, which is to achieve contracted for energy and peak savings within the specified time. Bidder shall limit supplemental information to no more than ten (10) pages. If Bidder’s proposed program yield is costlier than the expected market segment yield, PG&E recommends that Bidder explain in the “Supplemental Information” section why the program will help achieve the Commission’s and PG&E’s energy efficiency portfolio objectives despite higher costs. For example, Bidder’s program may be able to produce greater penetration, be more comprehensive than other alternatives, or address a measure that is more costly to deliver than other measures for that segment.

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8.0 EVALUATION PROCESS AND CRITERIA

8.1 Overview Proposals will be evaluated by a team of at least two reviewers.

8.2 Non-responsive Proposals

Eligible proposals must meet the following minimum requirements to be evaluated: (a) Bidder must register intent to bid by July 12, 2006. (b) The proposal must contain all of the items listed in the proposal

checklist. (c) The proposal must be submitted on time to the location identified in

this package (d) The proposal must be open to PG&E customers only (e) The proposal must be within the budget range described in this

RFP

Proposals failing to satisfy any of these requirements will be considered non-responsive. At its sole discretion, PG&E may notify Bidders who have made errors or omissions that can be easily corrected, and these Bidders will be given seven (7) days to respond. It is within PG&E’s sole discretion to determine whether a proposal is responsive, and whether any submitted corrections cure a non-responsive proposal. PG&E will use the following criteria set forth in Exhibit 4 to select bids.

9.0 CONTRACTOR VALUES

9.1 PG&E places high value on its customers, employees and shareholders; the environment; safety; continuous improvement; and conducting business in an ethical manner, as detailed in Exhibit 7 hereto, Contractor Values.

10.0 CONFIDENTIALITY

10.1 In the course of performing Work, successful Bidders may have access to confidential commercial or personal information concerning, but not limited to, California residents, technological, ratemaking, legislative, and personnel matters, and practices of PG&E, its parent company, subsidiaries, affiliates, or members of the public. Bidder agrees not to disclose any such confidential information or otherwise make it available to any other person, including any affiliate of PG&E that produces energy or energy-related products or services, without the prior written approval of PG&E. Bidder shall implement and maintain reasonable security procedures and practices appropriate to the nature of the information, to

38


protect any personal or confidential information from unauthorized access, destruction, use, modification, or disclosure.

10.2 Bidders are not guaranteed access to PG&E Proprietary or Trade Secret

information, including, but not limited to, customer data or information. However, if PG&E does grant Bidder access to such information, Bidder and Bidder’s employees and subcontractors will be required to sign PG&E’s non-disclosure agreement, attached as Exhibit 8.

11.0 NON-EXCLUSIVITY

11.1 THE PARTIES AGREE THAT THIS RFP WILL NOT ESTABLISH AN EXCLUSIVE CONTRACT BETWEEN PG&E AND BIDDER NOR CONSTITUTE A COMMITMENT BY PG&E, WHETHER EXPRESS OR IMPLIED, TO CONTRACT. PG&E EXPRESSLY RESERVES ALL ITS RIGHTS, INCLUDING BUT NOT LIMITED TO THE FOLLOWING: THE RIGHT TO UTILIZE OTHERS TO PERFORM OR SUPPLY WORK OF THE TYPE CONTEMPLATED BY THIS RFP; THE RIGHT TO REQUEST PROPOSALS FROM OTHERS WITH OR WITHOUT REQUESTING PROPOSALS FROM BIDDERS FOR WORK OF THE TYPE CONTEMPLATED BY THIS RFP, AND THE UNRESTRICTED RIGHT BY PG&E TO RE-BID OR PERFORM ANY SUCH WORK.

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ATTACHMENT 1 AVOIDED COST CALCULATOR

The Avoided Cost Calculator and related documents are posted at PG&E’s website at: www.pge.com/3PEnergyEfficiencyRFP

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2006-2008 Energy Efficiency Programs Request for Proposal: Bid Number RFP-006-06-DJC

ATTACHMENT 2

COMPANY AND EMPLOYEE INFORMATION I. General Information

A. Bidder Information Company Name Street Address Mailing Address City State Zip Code Telephone Fax Number

B. Contact Contact Name Mailing Address City State Zip Code Telephone Fax Number E-Mail Address

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C. Business Information Nature of Business Ownership Structure (e.g. Partnership, Proprietorship, Joint Venture) and State (e.g. California) Date Business Formed Parent Company (If any); include address Affiliates (If any); include addresses Subsidiaries (If any); include addresses Is company a for-profit company or an Internal Revenue Service 5OI (c) (3)-qualified nonprofit?

D. Management List key management employees (name and title) who would be involved in designing and implementing the proposed program. Attach resumes.

E. Employees Total Permanent Employees Total Peak Manpower on a Single Project (Largest) Total Number of Employees Proposed for Program Development Total Number of Employees Proposed for Program Implementation

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ATTACHMENT 3 REFERENCES

1. Stage I: Provide three relevant, satisfactory references.

In addition to three references above, Bidder must provide one reference from primary funder for each energy efficiency program Bidder has implemented as prime in past five (5). Stage II: Provide up to ten references for work performed in the past three (3) years that is related to the work Bidder proposes to do in response to this solicitation. References can be from customers.

2. Include the following information for each reference included:

• Reference Name • Title • Company • Mailing Address • Telephone • Brief description of Bidder's work for reference and explanation of how it

relates to work that Bidder proposes.

3. PG&E reserves the right to request additional references from Bidder to complete

proposal evaluation.

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ATTACHMENT 4

License and Insurance Information

Stage I Bidders shall describe what licenses are required for the work they propose to perform and include an affirmative statement that Bidder has all necessary licenses. Bidder shall include affirmative statement that it has insurance for the required coverage shown in the general terms and conditions. Stage II In addition, Bidder shall include copies of any and all licenses and/or registrations required for the performance of the proposed work, including subcontractors. Required licenses could include, for example, State of California General Contractors and Electrical Contractors license (C10, and C-20 for HVAC); however, it is the Bidder’s responsibility to determine what licenses are required.

Bidder shall provide the certificate of insurance for the required coverage shown in the general terms and conditions,

Bidder shall provide its Dunn and Bradstreet number, most recent annual report, recently audited financial statement or equivalent, proof of sufficient line of credit to perform the proposed work.

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ATTACHMENT 5 SUPPLIER DIVERSITY STATEMENT

As part of the bid Proposal, each Bidder shall submit a written subcontracting plan in accordance with Exhibit 1A (to PG&E’s GCs), “Diversity and Equal Opportunity” of the General Conditions, that specifies how the Bidder would contribute to achievement of PG&E's goals of purchases with women, minority and disabled veteran-owned business enterprises (WMDVBEs). PG&E is subject to CPUC General Order (GO) 156, which sets forth an overall goal to purchase a minimum of 21.5% of its goods and services from WMDVBEs. GO 156 sub-goals are to purchase goods and services at a minimum of: 15% from minority-owned, 5% from women-owned, and 1.5% from disabled veteran-owned business enterprises. GO 156 requires each utility to establish and maintain a subcontracting program for the purpose of encouraging its prime contractors to utilize WMDVBE subcontractors. GO 156 does not authorize or permit a utility to utilize set-asides, preferences, or quotas in administration of its WMDVBE program. Each Bidder will make maximum good faith efforts to assist PG&E in meeting its goals. Bidder shall set forth goals it deems to be appropriate for this Proposal. These goals should represent percentages that are reasonably attainable for this Proposal but would require aggressive efforts on the part of the successful Bidder. Primary verification of WMDVBEs shall be by the California Public Utilities Commission (CPUC) WMDBVE Clearinghouse or agencies comparable to the CPUC Clearinghouse. The Bidder shall check with the CPUC’s Internet web page for a list of agencies comparable to the CPUC Clearinghouse. To assist the Bidder in any diversity subcontracting efforts, the Bidder may contact PG&E’s Supplier Diversity Representative Tita Gray at (415) 972-5997. If awarded a contract, with each invoice submitted to PG&E, Contractor shall provide to PG&E’s Supplier Diversity Office report in the form of Exhibit 1A to the General Conditions, showing total dollars Contractor has spent with WMDVBEs pursuant to any subsequent Contract for the previous month. The address for PG&E’s Supplier Diversity Office is 245 Market Street, Mail Code N5D, P.O. Box 770000, San Francisco, CA 94177, (phone 415-973-0888; fax 415-973-2553).

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Questionnaire Supplier Diversity

In accordance with Section 13.0 “Supplier Diversity Statement” of the General Instructions and Provisions PG&E has a California Public Utilities Commission goal for expenditures to Women-, Minority-, and Disabled Veteran-owned Business Enterprises (WMDVBEs) of 21.5%, distributed as 5.0% WBEs, 15.0% for MBEs, and 1.5% for DVBEs. In addition to completing Exhibit 1A in the General Conditions, please describe exactly what steps your company will take in order to help PG&E achieve its Supplier Diversity goals, and specify a proposed goal, if different from 21.5%.

Bidder Response:

2. What percent of your expenditures with PG&E do you plan to commit to support

our Supplier Diversity program?

____% WBE ____% MBE ____% DVBE

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2006-2008 Energy Efficiency Programs Request for Proposal: RFP-006-DJC

ATTACHMENT 6 REQUESTED EXCEPTIONS TO PG&E’S CONSULTING SERVICES

GENERAL CONDITIONS

Contracts with Bidders will include PG&E’s GCs. Bidder must specify either: 1) the Bidder’s acceptance of the conditions stated; or 2) details of any exceptions taken by the Bidder to the General Conditions and the reasons for such exceptions and the proposed alternative language. Bidders must also indicate which sections it wishes to delete in entirety. Finally, Bidders must provide language for any new sections it wishes to add.

PG&E will consider the nature and extent of any requested changes, deletions or

modifications that Bidder requests. However, PG&E may decline Bidder’s requested changes. Bidder may withdraw its offer if PG&E does not agree to Bidder’s proposed changes to its GCs.

PG&E may require Bidder to use other than PG&E Consulting Services General Conditions for its final contract with PG&E depending on the nature of the Bidder's proposed work. PG&E will discuss the use of other than its Consulting Services General Conditions, if appropriate, during contract negotiations.

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ATTACHMENT 7 LABOR RATES

Bidder must complete table below for all staff or staff categories (if not designated

“key staff” e.g. administrators) who will work on the program if Bidder’s proposals selected:

Name/Title or Staff Category (e.g. administrative, project management, etc.) Key Management Staff listed in Attachment 2 shall be identified by name

Fully Loaded Labor Rate ($/hr)

Years of Relevant Experience in Energy Efficiency Field

PG&E reserves the right to ask for supporting documentation during Stage II

evaluations or negotiations if needed to complete evaluation or negotiation.

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ATTACHMENT 8 SIGNATURE PAGE

By signing this document I, ___________________, certify that: 1. I am the authorized representative of the Bidder and am qualified to bind Bidder

to this bid;

2. The information on Bidder’s proposal package is true and correct. I understand that Bidder’s submission of misleading, untrue, or incorrect information will be grounds for disqualifying all of Bidder’s bids in this solicitation.

3. I agree that, if PG&E awards Bidder a contract, the Bidder will perform the work diligently and in accordance with the contract.

Signed this ___________ day of ______________(month), in

____________________________________(town/city, state).

BIDDER: [company]

BY:

TITLE:

ADDRESS:

DATED:

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EXHIBIT 1

2006 – 2008 Portfolio Summary

The 2006 – 2008 Portfolio Summary is posted at PG&E’s website at: www.pgecom/3PEnergyEfficiencyRFP.

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EXHIBIT 2

Areas for Bid

Introduction: Bidders shall indicate under which of the two program

categories it seeks to have its proposal evaluated. Different bid evaluation criteria apply to each program category. See Exhibit 4.

NOTE: Retrocommissioning programs (RCx) have additional requirements

described at the end of this exhibit. Bidders who propose Retrocommissioning program should refer to these requirements as they prepare Stage I and Stage II bids.

Innovative Program Category Eligible proposals in this category are: any new technology, marketing

approach or customer segment not already offered or served in PG&E’s 2006 – 2008 EE portfolio by any delivery channel (IOU, LGP, 3-P). May bid new technologies if bidder can demonstrate that technology is commercially available and performance issues have been investigated and resolved.

Targeted Program Category Eligible proposals in this category include proposals that target markets

and technologies listed below. Below, PG&E has identified specific targeted markets that it seeks

proposals, as well as specific technologies that could be offered in all markets, which are identified as “cross-cutting” proposals. In the list below, some technologies are listed both under a particular market segment as well as in the “cross-cutting” category, which indicates the technology is of particular interest in the identified market segment.

NOTE: For non-residential customers, proposals can be submitted for

retrofit, new construction, or both. Medical Hospital • Private medical and dental offices, nursing facilities, and assisted

care facilities below 500 kW. Programs that deliver a mix of deemed savings measures to this market are of particular interest.

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• Retrocommissioning Agriculture • Lighting retrofit opportunities in agricultural and food processing facilities,

especially • large warehouses, packing sheds, food processing facilities, and cold

storage facilities. Technologies might include: induction lamps, High Intensity Discharge lights, T5s, T8s with occupancy sensors, etc.

• Mid-Sized Food Processing or "Agricultural Operations" Facilities.

Excludes: 1. wineries, dairies and refrigerated warehouses; 2. customers greater than 200 kW (plus all accounts that are assigned to PG&E Account representatives) and 3. refrigeration.

• Combined energy efficiency and demand response opportunities using

EMS systems in food processing facilities (or any market sector). Energy Management Systems (EMS).

Retro-commissioning (RCx)

• See below for more detailed description. Mass Market

• Efficient boilers and boiler controls (program must offer both, not just one measure)

• State-of-the-Art lighting (promoting higher efficiency than Energy Star and Title 24), including Super T-8

• Evaporative coolers • LCD screens • “Vampire” loads: energy wasted by household electronic devices that are not

performing useful functions, typically associated with devices that are in an off or standby state. Studies indicate that “vampire” load represents about 5% of average household load.

Residential New Construction

• Lighting beyond code plus lighting controls • Manufactured housing • Evaporative coolers

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Commercial Buildings

• All energy efficiency technologies • PG&E encourages property managers to submit proposals for this sector • Excludes state-owned (but not state leased) buildings • Retrocommissioning

Hospitality/Retail/Schools

• Retrocommissioning for stores and hotels • Retail lighting: high efficiency lighting • Energy Management Systems

Industrial

• Air compressor systems • Motor efficiency program • Boilers, heating systems and heat recovery systems upgrade • Advanced control systems technology • Plastics technology improvements

Cross-Cutting

• High-efficiency lighting (beyond Title 24 or Energy Star standards) • Energy Management Systems (EMS)

o Excludes smart thermostats for residential and small commercial customers.

• Retrocommissioning • Evaporative coolers

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PG&E Targeted Solicitation Retro-Commissioning Target Area

(Further Detail)

1) Introduction

PG&E is seeking to select a single vendor or Project Team to design and implement a Retro-Commissioning (RCx) Program with an estimated budget of $10,000,000 with projected net program impact of 37.8 GWh, 9.4 MW and 250,000 therms in energy savings and reductions.

2) Program Background

Retro-Commissioning (RCx) is a systematic process for optimizing an existing building’s performance by identifying and implementing relatively low-cost operational, maintenance and control improvements. PG&E believes the opportunities for RCx savings are great throughout its service territory and wishes to more fully support growth in the industry. This Appendix summarizes key features required for RCx bids in this forthcoming Targeted Third Party Solicitation. The primary goal of this program is to maximize delivery of cost effective RCx energy savings while reducing risks associated with past RCx programs. Past programs, throughout the country, have focused on providing detailed technical assistance and incentives to customers without demonstrating firm commitment on behalf of participants to implement measures. The results from this approach are mixed, with some participants taking full advantage of program benefits resulting in operational changes and large energy savings and others making only minor changes with commensurate savings. To allow RCx service providers and program participants under a RCx program with statewide-consistent elements, PG&E is interested in supporting a model similar to what has been proposed in the Fall 2005 Southern California Edison (SCE) RCx solicitation.

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3) Summary of Required Elements That Must Be Contained in RCx Proposals

PG&E seeks RCx proposals that will offer a comprehensive RCx process to the customer’s building. Selected proposals will consist of two phases: a detailed program design phase and an implementation phase. PG&E will only consider RCx proposals that contain the following elements: 1. Statewide-consistent elements listed below; 2. Elements needed to address common market barriers and problems that have faced RCx programs in the past; and 3. Elements that must be included to address needs of PG&E portfolio.

Statewide Consistent Elements: Proposals must contain the following elements for statewide consistency is RCx program design and delivery:

a. Developing the detailed program design that includes templates and methodology to ensure a consistent and complete product delivery.

b. Marketing to customers.

c. Customer enrollment and program agreement.

d. Marketing to RCx Service providers.

e. Completed site audits and collection of all equipment and energy data, identification of RCx and energy efficiency opportunities, completion of the analysis, and making energy efficiency and RCx recommendations to the customer.

f. Presentation of the recommendations to the customer and obtaining customer agreement to proceed with the implementation of the RCx measures.

g. Explanation to the customer about the incentives and RCx agreement.

h. Implementation of eligible measures.

i. Post installation inspection for quality assurance.

j. Tracking program and customer activity.

k. Offering assistance for Energy Star Labeling and building benchmarking.

l. Offer Incentives for Building Operator Certification (BOC).

m. Provide information or assistance for parallel initiatives such as LEED™-energy benchmarking and certification.

Elements to Address Market Barriers: Proposals must contain the following elements to address market barriers that have faced RCx activities in the past:

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a. Careful building screening to reduce risk of ineffective RCx activities.

b. Owners will be involved early, and screened based on their willingness and ability to undertake initial program steps.

c. Building operators will be involved early based on their willingness and ability to be an integral part of the RCx process.

d. Targeting owners that have already engaged in energy efficiency activities and experienced success.

e. Ensuring the persistence of savings through carefully targeted requirements for building documentation, training, and energy tracking.

f. Enhancing the building system optimization and RCx infrastructure by providing consistent protocols suited to different building sizes and complexity, and thoroughly training service providers on the program.

g. Processes will be developed to ensure that the process moves along at a reasonable rate and takes into account problems typically encountered.

h. Method for identifying and capturing opportunities for continuous improvement based on market experience and market response.

Required PG&E-Specific Program Elements: In addition to the items listed above, PG&E is interested in including to accommodate differences in utility structure and customer needs. They are as follows: a. Close coordination with PG&E Market Segment leads for activity within each

segment is essential. Market segment managers will be involved in program marketing.

b. Review of program format, incentive structure and process with 3-5 representative participants shall be coordinated with PG&E Account Services.

c. PG&E is interested in supporting a format that allows iterative RCx participation. This model might include an initial RCx effort that is focused on a specific end use, or system that is clearly not performing. A customer would be eligible for repeat participation after only 2 years if an initial review finds past measures still performing and potential for additional RCx savings. An iterative RCx detailed audit work scope for this participant would build on earlier work and likely be performed by the same service provider. This process could transparently accommodate continuous or monitoring based commissioning through its incentive structure.

d. Clear methodology for handling, at a commensurately reduced cost, participants that have already begun the RCx process. These participants may include those from past RCx programs that have not implemented (Legacy Projects),

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customers that have completed a PG&E funded Scoping Audit, and pre-screened leads with firm commitments from Local Government Partnerships.

e. Early identification and implementation of common RCx measures such as broken economizers, gross scheduling mismatches, and simple equipment staging issues. Often times these simple measures are spotted during an initial or scoping audit. They should be corrected and accounted for as soon as possible, in many cases this may happen before a detailed audit is started.

f. Bundling of RCx program with retrofits incentivised by service provider at rates comparable to those of applicable PG&E programs. Installation of retrofit measures and RCx measures shall occur seamlessly from the participant’s perspective.

g. Clear customer commitment to implement measures with a given payback criteria, subject to repayment of a fraction of detailed investigation audit costs that are above a fixed level.

h. Participant Off-Ramps. Participants that have little or no RCx efficiency opportunities identified during the screening and or scoping stage shall be redirected to other existing programs. These programs may include demand response programs, less expensive traditional audit programs, mass market programs or new construction programs as deemed necessary by the program team.

4) Design Phase Tasks

The Program Design Phase lays the groundwork for the Program implementation phase. The major goal of this phase includes developing an optimized and scalable RCx program plan and the supporting materials, processes, logic and templates that will be used to implement it.

Key elements in the design phase include:

(a) Develop a marketing plan which includes a timeline and clear program goals. The marketing plan shall be a multi-channel approach soliciting customers from numerous groups such as; PG&E staff, professional associations, trade allies, and ancillary energy efficiency organizations.

b) Develop marketing materials. These materials may contain information and features found in past third party programs or the SCE program, however, they shall also have the look and feel of other PG&E branded programs.

c) Develop program implementation plan. This plan shall clearly identify each step in the RCx process and include tasks and responsibilities for the Program Administrator, PG&E, RCx service providers and program participants. The implementation plan shall include a timeline, program budget, flowchart, incentive guidelines, detailed screening process, and savings verification plan.

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d) Program templates, training materials and workshops, and online program

information satisfactory to PG&E shall be produced. e) Energy Star benchmarking partnership plan. All RCx program participants shall

be evaluated and rated using the Energy Star Program. The program team shall coordinate with the Energy Star program staff to deliver these results and implement a system to re-rate buildings over time. Benchmarking will provide a visible marketing opportunity for future interventions as well as a tangible demonstration of customer progress towards an efficiency goal.

f) Reporting details; The program administrator will need to apprise PG&E about implementation progress, measure installation, budget and task expenditures on a regular basis.

5) Implementation Phase Tasks

Upon the approval of the Program Design Phase, the Program Implementer will be responsible for the overall implementation of the program. The implementation for the program shall follow the approved plan set forth during the Program Design Phase. The Program Team shall oversee the day-to-day technical and reporting tasks for the program. These activities include implementation of the marketing plan, budgeting, selection and screening of RCx sites, reporting, qualification and oversight of RCx providers, evaluation of RCx measures, processing of incentive payments, inspecting sites, coordinating retrofit work with other programs, review training and documentation and offer Energy Star labeling and building operator certification rebates.

Specific implementation tasks include;

a) Implement Marketing Plan. b) Program Orientation- As there will be numerous RCx service providers

participating in the SCE program, this orientation should be complementary to the SCE training. Providers that have completed SCE training should be given an update highlighting any program differences and approved for participation in the PG&E program.

c) Qualify RCx providers – Similar to the previous task, RCx provider qualification shall be done in coordination with SCE in order to minimize duplication of effort for both the Program Team and the Service Providers.

d) RCx Workshop – The program rollout should include program participation details and marketing information that will benefit all stakeholders.

e) Screen participants. The key goal of this task is to minimize engineering and program expenditures that do not yield energy savings. Participant screening at a minimum may include criteria for building size, past energy efficiency history,

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facilities personnel skill level, customer budgeting process and capital availability, existing building automation system potential and condition of facilities.

f) Match RCx service providers to participants as requested. g) Implement and oversee RCx work. This task includes budgeting, reporting

activity to PG&E, coordination with owners and service providers, measure approval, inspections and QA/QC work.

h) Coordinate with EM&V contractor. As determining measure savings for RCx measures can be elusive, it is important that the Program Team carefully document assumptions, pre-installation conditions, and operational changes that are not evident in a post installation inspection. This information should be clearly made available to the designated CPUC approved EM&V contractor as required.

6) Program Goals As stated earlier, all program processes shall be scaleable. Based on program

success PG&E may, at its discretion, increase or decrease the program budget. For the purposes of arriving at comparable bids, potential bidders should rely on the following assumptions about program size and features:

The target program size shall be approximately 350 buildings with 200 of them at or above 100,000 sq.ft. and 100 buildings at or above 250,000 sq.ft. for a total of 45 million sq.ft. Projected Net savings are based on an approximate 7% savings fraction, an average whole building electric EUI of 15kwh/sq.ft., and a Net to Gross ratio of 0.80. The product of these assumptions equals a net program saving goal of 37.8 gWh and 9.4 mW. (these are rule of thumb estimates and may be refined slightly).

7) Program Incentives

The approximate incentive level per square foot for the program shall be loosely based on building energy use indexes (EUI’s). Incentives for a manufacturing clean room or medical research facility with high energy usage would be higher per square foot than those offered for an office building. While these incentives will be formula-based, the approximate incentives for a typical office building are as follows:

Investigation Phase: $0.05-$0.10/sq.ft. based on size and number and complexity of systems. Implementation Phase: $0.05/sq.ft. These incentives should be provided to assist customers buy down simple payback to one year. Follow-Up: A fixed incentive of from $2,000- 10,000 will be provided for the RCx service provider to assist with measure implementation, verification of installations, and to provide documentation and training to ensure persistence.

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EXHIBIT 3

Portfolio and Sector Levelized Costs

TRC BC Ratio

PAC BC Ratio

Levelized Cost PAC ($/kWh)

Levelized Cost PAC ($/therm)

Mass Market(Residential & Non-Residential)

1.59 2.30 0.034$ 0.387$

Ag & Food Processess 2.04 3.01 0.028$ 0.189$ Schools & Colleges 2.25 2.44 0.037$ 0.232$

Retail Stores 2.57 3.36 0.023$ 0.270$ Fab Process Heavy Industries 2.34 3.85 0.022$ 0.182$

Hi-Tech Facilities 2.51 2.50 0.033$ 0.684$ Medical Facilities 2.11 2.20 0.038$ 0.345$ Office Buildings(Large Com'l)

2.44 2.66 0.033$ 0.350$

Lodging Facilities 1.84 2.11 0.040$ 0.104$ Res New Construction 0.82 1.36 0.100$ 0.686$

OVERALL PORTFOLIO PERFORMANCE

1.61 2.15 0.0379$ 0.3569$

NOTE: The figures in this table may change based on final negotiations with Local Government Partnerships and Third Party program implementers.

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EXHIBIT 4

Commission-Adopted Bid Evaluation Criteria

Stage I Evaluation Criteria PG&E Stage I-All Solicitations Threshold Part 1 Y/N Is proposal cost-effective? Y/N Is bid responsive? Y/N Does vendor have necessary licenses? Y/N Is vendor financially stable to complete work? Y/N Threshold Part 2 Vendor References 5 Track Record 5 Program Team 5 Project Feasibility 5 NOTE: Threshold criteria are standards that proposals must

meet before being further considered. Part 1 threshold criteria will be scored “yes” or “no”-proposal

meets criteria or does not. Proposals that receive any “no” scores will not be further considered. Reviewers will need to document basis for “no” score and PRG members will be permitted to review justification.

NOTE 2: Part 2 threshold criteria will receive points ranging from 1-5. To be considered further, proposals will need to receive at least 3 points in each individual category and 12 points total to be reviewed further.

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Stage II Targeted Evaluation Criteria PG&E Targeted Solicitations Skill and Experience 10% Levelized Costs 40% Portfolio Fit/Improved Performance 25% Comprehensiveness/Lost Opportunities 15% WMDVBE 10% Totals 100%

Stage II Innovative Evaluation Criteria PG&E’s Innovative Solicitation Criteria PG&E Levelized Cost 20% Portfolio Fit/Improved Portfolio Performance 20% Comprehensiveness/No Lost Opportunities 10% Innovation 30% Experience 10% WMDVBE 10% Totals 100%

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2006-2008 Energy Efficiency Programs Request for Proposal: Bid Number RFP-F-006-06-DJC

EXHIBIT 5 PG&E CONSULTING SERVICE GENERAL CONDITIONS

Exhibit 1 contains PG&E’s GCs. If Bidder proposes work other than

consulting, professional and/or engineering services, other PG&E General Conditions may apply.


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EXHIBIT 6

PG&E DRAFTED SPECIFIC CONDITIONS 2006-8 Non-Utility Energy Efficiency Program

[Program Title]

INTRODUCTION

1.1. The California Public Utilities (CPUC) directed utilities to competitively-bid at least 20% of its portfolio for programs that would increase innovation or improve portfolio performance. (Interim Opinion on the Administrative Structure for Energy Efficiency, D.05-01-055, mimeo p. 91.)

1.2. Furthermore, the Commission noted that California’s Energy Action Plan has placed energy efficiency at the forefront of resource procurement activities in California. Consistent with the Commission’s direction, PG&E selected programs that would best meet its resource procurement needs.

1.3. In addition to the central role in meeting its resource procurement needs, PG&E sought programs that will achieve high customer satisfaction to increase both customer participation and technology market penetration.

1.4. PG&E will closely monitor this program’s performance, as well as the performance of its demand-side portfolio as a whole. PG&E may reduce or terminate funding for programs that fail to meet their resource procurement and/or customer satisfaction objectives. Also, PG&E may shift funds from one program or market segment area to another during the 2006 – 2008 portfolio implementation to better achieve its resource procurement and customer satisfaction objectives.

1.5. Contract Objective: The objective of this Contract is for Implementer to help PG&E meet its procurement needs through providing [fill in blanks] Total Program Net KW Savings --- xxxxx, Total Program Net kWh Savings - xxxx and Total Program Net Therm Savings – xxxx for a Contract Budget of ____ with Measures and Number of Installations described in the Final, Approved E-3 Calculator set forth in Exhibit E. The allowable geographic area(s) and customer market segment(s) of this Program are set forth in Exhibit G. Implementer may not pursue or receive funds for any projects that are not within the defined geographic area(s) or customer market segment(s) without prior written approval of the IOU Contract Manager.

1.6. Program Overview: [Brief description of selected program to be inserted here.]


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2. DEFINITIONS In addition to the definitions listed in the General Conditions, the following definitions

shall apply:

2.1. CPUC or Commission – the California Public Utilities Commission.

2.2. Customer – A residence or business receiving electric and/or gas distribution service from PG&E and paying the Public Purpose Program surcharge.

2.3. Commitment – To constitute a commitment that would trigger payment

requires the following elements: 1) A signed agreement between the implementer and the customer that describes the project/measures to be installed at the customer premise(s), including estimated energy savings and incentive payments; 2) signature by the customer’s representative with the authority to commit funds and resources to complete the project; and 3) the time frame for the following project milestones: a) at least 50% of equipment (by cost) is ordered, and b) date that project will be installed and operational.

2.4. Energy Efficiency – Activities or programs that stimulate customers to reduce

customer energy use by making investments in more efficient equipment or controls that reduce energy use while maintaining a comparable level of service as perceived by the customer.

2.5. Implementer – The term “Implementer” shall have the same meaning as

Consultant or Contractor, i.e. party or parties entering into this Contract with PG&E for the Work.

2.6. Measures, Energy Efficiency Measures or EEM - Products or services

provided to customers that are designed to save energy and demand.

2.7. IOU – Pacific Gas and Electric Company.

2.8. IOU Contract Manager: The PG&E authorized representative responsible for administering this Contract, monitoring Contract activities, deliverables and expenses for PG&E and authorizing invoices for payment.

2.9. Project – The installation of Measures at a Customer facility.

2.10. Cost-Effectiveness – An indicator of the relative performance or economic

attractiveness of any energy efficient investment or practice when compared to the costs of energy produced and delivered in the absence of such an investment.


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2.11. Total Resource Cost (“TRC”) Test: The TRC test measures the net resource

benefits from the perspective of all ratepayers by combining the net benefits of the program to participants and non-participants. The benefits are the avoided costs of the supply-side resources avoided or deferred. The TRC costs encompass the cost of the measures/equipment installed and the costs incurred by the program administrator.

2.12. Program Administrator Cost (“PAC”) Test: Under the PAC test, the program benefits are the same as the TRC test, but costs are defined differently to include the costs incurred by the program administrator (including financial incentives or rebates paid to the participants), but not the costs incurred by the participating customer.

2.13. Cream Skimming – Cream skimming results in the pursuit of only the lowest

cost or most cost-effective energy efficiency measures, leaving behind other cost-effective opportunities. Cream skimming becomes a problem when lost opportunities are created in the process.

2.14. Dual Test – The requirement that an energy efficiency activity pass both the

TRC and the PAC cost-effectiveness test.

2.15. Energy Efficiency Measure – An energy using appliance, equipment, control system, practice (other than practices that rely solely on behavioral changes, such as turning off lights) or design improvement whose installation or implementation results in reduced energy use (purchased from the distribution utility) while maintaining a comparable or higher level of energy service as perceived by the customer. In all cases energy efficiency measures decrease the amount of energy used to provide a specific service or to accomplish a specific amount of work (e.g., kWh per cubic foot of a refrigerator held at a specific temperature, therms per gallon of hot water at a specific temperature, etc). For the purpose of this solicitation, solar water heating is an eligible energy efficiency measure, provided that it passes the Dual Test of cost effectiveness on a stand-alone basis.

2.16. Load Management – Programs which reduce or shift electric peak demand

away from periods of high cost electricity to non-peak or lower cost time periods, with a neutral effect on or negligible increase in electric use.

2.17. Lost Opportunity –A lost opportunity occurs when a customer does not install an energy efficiency measure that is cost-effective at the time, but whose installation is unlikely to be cost-effective if the customer attempts to install the same measure later.


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2.18. New Construction –1) New building projects wherein no structure or site

footprint exists; 2) addition or expansion of an existing building or site footprint; or 3) addition of new load, as in the example of an existing site adding a new process.

2.19. Nonresidential – Facilities used for business, commercial, agricultural,

institutional, and industrial purposes.

2.20. Average Demand (kW) - For a given customer service agreement, which has and is billed on a demand meter, the average demand is the average KW consumed during a 12 month period.

2.21. Maximum Demand (kW): For those customers who have and are billed on a

demand meter, the maximum demand is the highest demand (measured in kW), for a given customer service agreement, over a 12 month period.

2.22. Program Launch: Program is accepting Customer applications.

2.23. Residential – Existing single family residences, multi-family dwellings,

whether master-metered or individually metered, (defined as dwellings of five units or more with at least one wall or ceiling in common), and buildings that are essentially residential but used for commercial purposes, including, but not limited to, time shares, vacation homes, etc.

2.24. Retrofit – 1) Construction that involves complete removal, redesign and

replacement of the energy consuming systems of a building or process; 2) projects that require design and selection of new systems based upon the needs of new or modified space function(s); and 3) major tenant improvements that add new load.

2.25. Total Program Net Peak kW Savings: The annual net peak kW savings associated with measures installed by Implementer and approved by PG&E. For the purposes of this definition, savings are determined ex ante and will not be modified ex poste. Peak kW Savings is deemed to be the peak kW savings from the Database for Energy Efficiency Resource (DEER) for measures where data is available in DEER. For measures that are not in DEER, the peak kW is determined by using industry-accepted calculation methodologies approved by PG&E, based on DEER definition of peak kW.

2.26. Total Program Net kWh Savings: The annual net kWh savings associated with measures installed by Implementer and approved by PG&E. For the purposes of this definition, savings are determined ex ante and will not be modified ex poste. Net savings are those resulting from the Final, Approved Avoided Cost Calculator Workbook attached as Exhibit E.


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2.27. DEER Definition of Peak kW: Peak is defined as the average grid level impact

for the measure from 2 p.m. to 5 p.m. during the three consecutive weekday period containing the weekday with the hottest temperature of the year. DEER identifies these three contiguous peak kW days for each of the 16 California climate zones, based on the weather data sets developed for the California Title 24 Building Energy Efficiency Standards. DEER also defines a secondary peak demand period for educational facilities and other buildings that tend to operate at greatly reduced use during the peak demand period defined above. For this purpose, DEER uses the next highest peak during a period in which the facility is operated in full use mode.

2.28. User Entered kW – This is the sum across all measures of total peak reduction based on total units installed, and calculated using user-entered per-unit peak savings in the PG&E Avoided Cost Calculator. The user-entered per-unit peak savings must meet the DEER Definition of Peak kW described in 2.27.

3. SCOPE OF WORK 3.1. [Insert Bidder’s scope of work as negotiated and agreed upon]

3.2. [For installation programs] Inspection and Quality Assurance

3.2.1. Implementer shall submit to the IOU Contract Manager a Quality

Assurance and Measure Verification Plan, which describes Implementer’s installation standards, product specifications for eligible measures/hardware, quality assurance procedures, installation schedule, plan to verify that the installations are operating properly, including percentage of installations to be inspected, inspection agent, and dispute resolution procedures for tracking and responding to contractors and customer complaints or disputes. PG&E may provide additional oversight in the verification process. Implementer’s product and installation standards must meet or exceed PG&E’s product and installation standards for similar measures.

3.2.2. The IOU may utilize the following methods to verify that EEMs are

installed and operating: post installation on-site verification, work-in-progress on-site verification, product invoices, or other verification procedure, as appropriate. IOU reserves the right to conduct as many inspections as needed to ascertain that Implementer has completed the EEM installations as reported and consistent with the Quality Assurance and Measure Verification Plan. In order to accommodate the inspection process, Implementer shall, upon IOU Contract Manager request, provide the most current installation schedule


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showing date and location where EEM installations have been scheduled. In addition, Implementer shall submit the EEM installation and Customer data electronically in Excel or Access using data template to be provided by PG&E. Implementer shall ensure that IOU has access to the Customer site(s) for all verification inspections.

3.2.3. IOU’s verification inspection or review of the design, construction,

operation, or maintenance of the Implementer’s installation of EEMs shall not constitute any representation as to the economic or technical feasibility, operational capability, or reliability of the EEMs. The Implementer shall in no way represent to any third party that IOU’s verification inspection or review of the EEMs is a representation by IOU as to the economic or technical feasibility, operational capability, or reliability of such EEMs. The Implementer is solely responsible for the economic and technical feasibility, operational capability, and reliability of the Implementer’s EEM installations.

3.2.4. If IOU’s inspection reveals discrepancies between Implementer’s

reported EEMs and actual EEMs found, Implementer shall make on-site corrections within 15 calendar days and revise and resubmit the information provided to IOU Contract Manager. PG&E will inspect a statistically significant sample of installations (up to 100%) at no charge to the Implementer. If IOU determines that more inspections are needed to ascertain satisfactory completion of Implementer’s work due to failed inspections, IOU will at its sole discretion increase the number of inspections and charge Implementer for the additional inspections. Implementers shall also pay for IOU costs associated with re-inspecting failed inspections. The IOU inspection charges shall be deducted from the Implementer’s payment. The IOU and Implementer may develop alternate inspection procedures that accomplish the goal of this paragraph.

3.2.5. Carbon Monoxide Testing: Implementer shall perform a post-

installation carbon monoxide (CO) check when any work is done on or associated with a natural gas appliance. Implementer shall abide by the local IOU standard on performing CO checking which the local IOU will provide to the implementer.

3.3. [For rebate programs] Inspection and Quality Assurance

3.3.1. Implementer shall submit to the IOU Contract Manager a Quality

Assurance and Measure Verification Plan, which shall include the Program’s quality assurance procedures and plan to verify that the installations are operating properly, including percentage of installations to be inspected, who will bear costs of inspection,


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inspection agent, as well as internal and external policy and procedures manuals describing Program dates, eligibility requirements, incentive payment process, IRS 1099 reporting procedures, customer and contractor tracking and complaint dispute resolution procedures, and eligible product specification or standards. PG&E may provide additional oversight in the verification process. Implementer’s product and installation standards must meet or exceed PG&E’s product and installation standards for similar measures.

3.3.2. The IOU may utilize the following methods to verify that the incented

EEMs are installed and operating: post installation on-site verification, product invoices, or other verification procedure, as appropriate. IOU reserves the right to conduct as many inspections as needed to ascertain that EEMs are installed as reported. In order to accommodate the inspection process, Implementer shall provide the EEM incentive and Customer data electronically in Excel or Access using data template to be provided by PG&E. Implementer shall ensure that IOU has access to the Customer site(s) for all verification inspections.

3.3.3. IOU’s verification inspection or review of the design, construction,

operation, or maintenance of the EEMs rebated by Implementer shall not constitute any representation as to the economic or technical feasibility, operational capability, or reliability of the EEMs. The Implementer shall in no way represent to any third party that IOU’s verification inspection or review of the EEMs is a representation by IOU as to the economic or technical feasibility, operational capability, or reliability of such EEMs.

3.3.4. If IOU’s inspection reveals discrepancies between Implementer’s

reported EEMs and actual EEMs found, Implementer will be given 15 calendar days to revise and resubmit the information provided to IOU Contract Manager. Implementer shall be solely responsible for obtaining Customer refund of any overpayment of incentives. Implementer shall report the status of Customer refunds and deduct the refunded amounts from the following month’s expenditures reported in Implementer’s Monthly Report.

3.3.5. PG&E will inspect a statistically significant sample of installations (up to

100%) at no charge to the Implementer. If IOU determines that more inspections are needed to ascertain satisfactory completion of Implementer’s work due to failed inspections, IOU will at its sole discretion increase the number of inspections and charge Implementer for the additional inspections. Implementers shall also pay for IOU costs associated with re-inspecting failed inspections. The IOU


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inspection charges shall be deducted from the Implementer’s payment. The IOU and Implementer may develop alternate inspection procedures that accomplish the goal of this paragraph.

3.4. Changes to Customer Incentive Levels

3.4.1. Implementer may only change Customer Incentive Payment structure

and levels with notice to and written approval of the IOU Contract Manager.

3.5. Projects Identified Before Program Launch

3.5.1. Implementer must receive IOU Contract Manager written approval for

all project payments associated with projects that were identified and some project analysis completed by Implementer or another party before Program Launch. Such “legacy projects” are only eligible for payment under the following conditions: a) the Implementer contributed to the customer’s decision to act; b) the decision that Implementer contributed to customer’s decision to act is well-documented to PG&E’s sole satisfaction, and 3) Implementer does not receive payment for engineering studies or other Work that was already performed prior to Implementer’s involvement in the project or for which Implementer has received compensation through other means.

3.6. Prorating Customer Payments

3.6.1. Implementers shall not pay self-generation customers incentives for

energy savings that exceed the annual energy usage by the customer from PG&E. The annual energy usage shall be determined by averaging the past twelve (12) months of energy usage as determined from the time that the customer signs the customer application or customer agreement that commits the customer to pursue the project.

3.6.2. PG&E may change the policy and requirements for customer

incentives payments to self-generation customers within thirty (30) days written notice to Implementer.

3.7. Evaluation, Measure and Verification (EM&V)

3.7.1. Implementer shall comply with any Commission directive regarding

EM&V plans and fulfill all EM&V activities as may be required by the CPUC. PG&E will not pay incremental costs associated with CPUC EM&V activities.


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3.7.2. If required by the CPUC to support EM&V activities, Implementer shall

cooperate fully with the Plan contractor and subcontractors and provided all requested information, if any, to assure the timely completion of all Plan tasks requiring Implementer involvement or cooperation.

3.7.3. Implementer shall cooperate with any utility-administered process

evaluation. Implementer shall be reimbursed for reasonable costs associated with PG&E-administered process evaluations. PG&E will review and negotiate with Implementer as needed to finalize the process evaluation scope and budget, and amend this Contract as may be required.

3.7.4. For EM&V efforts Implementers need to have readily available full

program descriptions, detailed descriptions of data tracking systems, size of target market and baseline conditions, pre-program technical potential (if known), detailed participant data including financial assistance amounts.. For EM&V reporting, Implementer agrees to use definitions of terms supplied by PG&E (such as definition of residential, non-residential, retrofit, new construction).

3.8. Use of Current Evaluation, Measurement and Verification Information in

Reporting Program Savings 3.8.1. During the course of contract implementation, PG&E may identify new

savings estimates, net-to-gross ratios, or other values that may alter program savings. Implementer agrees to use modified values upon PG&E’s written request, providing that PG&E modifies Implementer’s program budget and/or overall program savings consistent with PG&E’s requested change.

3.9. Reporting

3.9.1. Required Reports


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Implementer shall submit all Required Reports listed in this section in accordance with the due dates listed below. If requested by the IOU Contract Manager, Implementer shall also submit reports to the CPUC in accordance with CPUC reporting protocols.

Required Reports Due Date Brief program description for

distribution to other implementers

As Part of First Monthly Report and thereafter as needed

Plan for Coordination with other programs in the portfolio


LIEE/CARE Coordination Plan as applicable


Monthly Report to IOU (Report covering prior month’s activities, accomplishments and expenditures) including invoice and supporting documentation to IOU Contract Manager

On or before the 15th calendar day of the month following performance

Quarterly scorecard which shall include but is not limited to:

1. Goals and cumulative net July –Sept Peak kW Savings, net annual kWh, and net annual therm savings

2. Forecast and accomplishments relative to forecast by month as set forth in Exhibit F. If Implementer’s cumulative expenditures or accomplishments vary from forecast by more than 5%, Implementer must provide short explanation of reason for variance. If cumulative savings are 5% or more below forecast, Implementer must provide short written explanation of how and whether Implementer can achieve overall program goals.

Within 45 calendar days after the end of each quarter


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3. Program quality report such as: rebate payment turnaround time, vendor payment over time, consumer complaints, regulatory issues and customer. satisfaction metrics

4. On a quarterly basis, Implementer must provide new monthly savings forecast to keep PG&E apprised of expected savings over time. However, Implementer’s performance will be assessed relative to Implementer’s initial forecast, not any revised forecast that Implementer submits.

Annual Report to IOU (Report that includes cumulative documentation on all program activities and expenditures during each program year as required by the CPUC for each Annual Earnings Assessment Proceeding (AEAP).

On or before March 31 of each year following performance.

CPUC Reports using the most recent version of the reporting format and protocol issued by the CPUC.

As required by the CPUC

Final Report As directed by IOU Contract Manager

3.9.1.1. All reports shall be submitted no later than the due date

listed above to the IOU Contract Manager for review and written approval. Implementer shall provide additional information and supporting documentation to the IOU Contract Manager if requested.

3.9.1.2. Implementer hereby agrees that providing the information

and reports described in this section is a condition for receiving full payments referred to in Section 5. If Implementer fails to provide required reports and supporting documentation that are complete, accurate, and timely, PG&E reserves the right to withhold or reduce payments.


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3.10.3. st monthly report and thereafter as needed, Implementer

tivity.

nters

3.10.4. During the performance of the Authorized Work, Implementers are

will

.5. Coordination With Low Income Programs

3.10.5.1. This Section shall only apply to Authorized Work that in

3.10. Coordination With Other Programs

3.10.1. Implementers shall coordinate with other energy efficiency

programs in PG&E service territory, including programs implemented by PG&E, other non-IOUs, and local government partnerships, as well as programs targeting low-income customers, to enhance consistency in program offers where applicable, minimize duplicative administrative costs, and enhance the possibility that programs can be marketed together to avoid duplicative marketing budgets.

3.10.2. As part of Implementer’s first monthly report and updated thereafter

as needed, the Implementer shall provide to the IOU a description of its program suitable for distribution by the IOU and other energy efficiency program implementers to inform potential participants, including low-income participants if applicable, about Implementer’s program.

In its firshall list programs with which it could coordinate, and describe proposed coordination activities including a time line for each acIOU shall review the list of programs and proposed coordination activities, and either approve or suggest reasonable changes. Implementer shall incorporate all reasonable changes. Implemeshall describe in each monthly report any notable coordination activities with other energy efficiency programs.

expected to not create market barriers or lost opportunities for other program implementers. If the IOU determines that Implementer’s program may be creating market barriers or lost opportunities, IOUdiscuss its concerns with the Implementer. Implementer shall work with IOU to develop and implement mutually agreeable program changes to minimize market barriers or lost opportunities.

3.10

includes an energy efficiency measure that is includedthe IOU Low-Income Energy Efficiency program. This coordination is required because low-income customerswho participate in non-Low Income programs in some cases may lose their eligibility for future participation inseparately funded Low-Income programs. Further, low income customers should not pay for measures and


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services that they are eligible for at no cost through pre-existing Low-Income program offerings.

3.10.5.2. Implementers whose Authorized Work includes an energy

efficiency measure that is included in the IOU Low-Income Energy Efficiency program shall inform all customers about the Low-Income Energy-Efficiency (“LIEE”) and California Alternate Rates for Energy (CARE) programs, including eligibility requirements. Implementer shall then ask customers if they believe they are LIEE or CARE-eligible customers, and shall provide written information about the LIEE and CARE programs, including how the customer may participate in the programs and whom they need to contact to participate in LIEE or CARE, before attempting to sell any programs or measures with a cost to any such customers.

3.10.5.3. In its first monthly report and thereafter as needed,

Implementer shall submit to IOU a list of measures that require coordination with low-income programs, and its plan for ensuring compliance with this Section. The IOU shall review this information and either approve it or suggest reasonable changes. Implementer shall make any changes required by the IOU Contract Manager.

3.11. Prevention of Double-Dipping

Implementer shall implement the following mechanism and shall take other practicable steps to minimize double-dipping:

3.11.1. Prior to providing incentives or services to Customer for an energy

efficiency measure, Implementer shall obtain a signed form from Customer stating the following:

3.11.1.1. Customer has not received incentives (not including tax credits available under the Energy Policy Act of 2005) or services for the same measure from another utility, state, or local program for the last three (3) years.

3.11.1.2. Customer agrees not to apply for or receive incentives or services for the same measure from another utility, state, or local program; and

3.11.1.3. For residential customers, customer acknowledges that he or she has received information about the free LIEE program, which offer incentives or services for the same measure(s) that the customer may be eligible for.


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3.11.2. Implementer shall keep the Customer-signed forms for at least

three years after the end of the contract term whichever is later. In addition, Implementer shall submit the Customer-signed forms to the IOU upon request.

3.11.3. Implementer, its associates or subcontractors shall not knowingly

provide an incentive to a Customer or make payment to a Subcontractor who is receiving compensation for the same product or service either through another PGC or gas PPP surcharge-funded program, or through any other funding source.

3.12. Responding to and Tracking Customer Complaints

3.12.1. Implementer shall track all customer and contractor complaints that it receives through the mechanism that it describes in its Quality Assurance and Measure Verification Plan, and shall report on all complaints in its Monthly Reports. Implementer shall maintain a log of all customer complaints it receives, and shall retain that log in electronic form for at least five years after the end of the contract term or receipt of final payment.

3.13. Customer and Contractor Disclosure Obligations

3.13.1. Implementers shall prominently disclose to prospective program participants and customers, orally and in writing that customers are not obligated to purchase any full fee service or other service beyond that which is funded through this Program. The text of the disclosure must be in both English and Spanish and other languages as appropriate if the program specifically targets other language groups.

3.13.2. Implementers shall include the following English and Spanish

disclosure text, and where appropriate a non-English or Spanish translation thereof, in all material provided to prospective program participants and customers:


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“California consumers are not obligated to purchase any full fee service or

other service not funded by this program. This program is funded by California utility ratepayers under the auspices of the California Public Utilities Commission (CPUC.)”

Spanish Translation: “Los consumidores en California no están obligados a comprar servicios

completos o adicionales que no esten cubiertos bajo este programa. Este programa está financiado por los usuarios de servicios públicos en California bajo la jurisdicción de la Comisión de Servicios Públicos de California (CPUC.)”

3.13.2 Implementer shall inform any contractors or subcontractors that

participate in the program that they shall not be obligated to pay any fees, including training, material, or equipment fees, for participating in the program.

3.14. End Date for Direct Implementation Activities and Incentive Payments All implementation activities, including all installation activities and

Implementer payments to customers, shall be complete no later than December 31, 2008, unless Implementer receives IOU Contract Manager signed, written consent to install Measures after December 31, 2008.

3.15. End Date For Administrative Activities 3.15.1. Unless this Agreement is terminated pursuant to Section 41,

Cancellation and Termination of Contract, of the General Conditions, Implementer shall complete all administrative activities by no later than March 31, 2009, including submission of the Final Report, unless Implementer receives IOU Contract Manager signed written consent to end administrative activities later than March 31, 2009. The final invoice is due no later than April 15, 2009, and may not include charges for direct implementation or marketing activities conducted after December 31, 2008, absent IOU Contract Manager written approval to extend due dates.

3.16. Regulatory Reporting Requirements

3.16.1. Implementer shall comply with CPUC regulatory reporting requirements, which includes providing PG&E with required data in a format suitable for submittal to the CPUC. The regulatory reports shall contain all information and be in the format set forth by the CPUC, which may be modified from time to time by the CPUC.

3.16.2. Cost Allocation Methodology. Implementer shall respond to

questions or requests from IOU Contract Manager on how it has


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calculated or allocated costs listed in the Implementer’s reports, and shall make any changes, consistent with the budget format and definitions approved by the CPUC, requested by the IOU Contract Manager.

3.16.3. Subcontractor Costs/Activities. Subcontractor costs shall be

reported according to the format specified by the CPUC. 3.16.4. Labor. For each of the CPUC reporting categories (Admin,

Marketing, Direct Implementation and EM&V if applicable), provide a list of individuals and total hours worked for each person during the month, if required by the CPUC.

3.17. Supporting Documentation Requirements

3.17.1. Implementer shall provide supporting documentation to substantiate contract expenditures. Supporting documentation requirements are set forth in Exhibit D. PG&E may modify supporting documentation requirements from time to time with input and consent of Implementer. Implementer shall submit project/EEM data electronically each month. The specific format and detailed data requirements shall be consistent with PG&E’s program data requirements and will be provided to Implementer by PG&E.

3.18. Program Funds Must Directly Benefit Customers in the Service Territory from

which the Funds are Collected 3.18.1. The Program funds must directly benefit the customers in the

PG&E service territory from which the public goods surcharge funds were collected.

3.19. Marketing Materials

3.19.1. Implementer shall submit all marketing materials to IOU for review prior to their release, and may not release marketing materials without receiving IOU approval. In the event that IOU determines that Implementer’s marketing materials are fraudulent, misleading, not adequately substantiated, do not contain the required customer, or have used IOU’s name without permission shall require Implementer to delay releasing the marketing materials until the problems are corrected.

3.20. Information Protection


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Implementers will be required to conform to PG&E’s information protection policies in

effect during program implementation. PG&E will apprise implementer of changes to PG&E’s information protection policies.

3.21. [For programs that develop technical reports] Technical Reports

Implementer shall include the following language in all technical reports:

LEGAL NOTICE

THIS REPORT WAS PREPARED AS A RESULT OF WORK SPONSORED

BY THE CALIFORNIA PUBLIC UTILITIES COMMISSION (COMMISSION). IT DOES NOT NECESSARILY REPRESENT THE VIEWS OF THE COMMISSION, ITS EMPLOYEES, OR THE STATE OF CALIFORNIA. THE COMMISSION, THE STATE OF CALIFORNIA, ITS EMPLOYEES, CONTRACTORS, AND SUBCONTRACTORS MAKE NO WARRANTY, EXPRESS OR IMPLIED, AND ASSUME NO LEGAL LIABILITY FOR THE INFORMATION IN THIS REPORT; NOR DOES ANY PARTY REPRESENT THAT THE USE OF THIS INFORMATION WILL NOT INFRINGE UPON PRIVATELY OWNED RIGHTS. THIS REPORT HAS NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION IN THIS REPORT.

4. ACCESS AGREEMENT

4.1. Implementer may need access to customer facility. In each instance,

Implementer shall:

4.1.1. supply all necessary tools and materials to perform the services under this Contract.

4.1.2. be responsible for obtaining a signed Access Agreement, as approved

by PG&E, or implementer’s own IOU-approved comparable form, from an authorized representative of the Customer before Implementer can enter premises. The original signed Access Agreement shall be retained by the implementer for a period of five years from the end of contract, and provided to the IOU upon request.

5. PAYMENT TERMS

5.1. Payment to Implementer shall be dependent upon Implementer’s satisfactory completion of tasks (including submission of timely and accurate monthly reports) or achievement of goals, as demonstrated by deliverables submitted


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by Implementer. Satisfactory completion means that the deliverables are completed to the satisfaction of the IOU Contract Manager.

5.2. Payment Definitions [not in alphabetical order] 5.2.1. Contract Budget

The Contract Budget is the cumulative PG&E payments for Authorized Work under this Contract which shall not exceed $ __________. 5.2.2. Time and Material-Based (T&M) Payments

Portion of Contract Budget which PG&E shall pay on a time-and-materials, not-to-exceed basis for each of the tasks and deliverables indicated in Section 5.3.1. Implementer shall bill PG&E according to labor rates contained in Exhibit A. The total Program Time and Materials-Based Payments shall not exceed the Program T&M Budget, which equals [fill in amount], without written authorization from the IOU Contract Manager 5.2.3. Performance-Based Budget

Portion of Contract Budget to be paid on a $/net kWh or $/net therm basis. Performance-Based Payments shall exclude Customer Incentive Payments. Project-specific Performance-Based Budget will be paid in three (3) installments upon the completion, to PG&E’s satisfaction, of the deliverables and requirements for each installment. The Installments include: Project Commitment, Project Equipment Order and Project Installation. The total Performance-Based Budget shall not exceed [fill in amount] without written authorization from the IOU Contract Manager. 5.2.4. Customer Incentive Payments

Payments made by Implementer to Customer. Total Customer Incentive Payments shall not fall below the Customer Incentive Budget which equals $ xxxx unless approved in writing by IOU Contract Manager.

5.3. Time and Materials-Based Payments

5.3.1. PG&E shall make Time and Materials-Based Payments for the

following program deliverables [NOTE to Negotiators: Appropriate to consolidate some tasks below to derive fewer not-to-exceed amounts]:


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Task Due Date Not-To-

Exceed Amount

Policy and Procedures Manual

Customer Application Within one month of contract execution

Quality Assurance/Quality Control Plan (QA/QC Plan)

Within one month of contract execution

Program Coordination Plan

First Monthly Report

Program Quality Metrics Implementer and PG&E will work together to develop Program Quality Metrics, which shall not be final until PG&E approves them.


Customer Satisfaction Metrics Implementer and PG&E will work together to develop Program Quality Metrics, which shall not be final until PG&E approves them.


Access Agreement (if req’d)

License to Use (if req’d) Customer Identification and Marketing Plan

For EM&V Preparation: full program descriptions, detailed descriptions of data tracking systems, size of target market and baseline conditions, pre-program technical potential, detailed participant data including financial assistance amounts and consumption histories, non-participant data for end-user focused programs, detailed data for


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midstream, upstream focused programs and information, education and advertising focused programs. [Other deliverables as appropriate for specific tasks]

5.3.2. Implementer shall not receive payment for the deliverable until the

deliverable has been approved by PG&E’s assigned Contract Manager.

5.3.3. Implementer shall bill PG&E according to labor rates contained in

Exhibit A. The total Time and Materials Based Payments shall not exceed $[XXXX]

5.4. Performance-Based Payments [NOTE: Figures below are illustrative and

would vary based on specific program]

After Program Launch, PG&E shall pay Implementer Project-specific Performance-Based Payments in three installments as described below, on a per Project basis, and contingent on Implementer’s submission of acceptable documentation indicating that the deliverables and requirements for each installment payment criteria have been met. 5.4.1. [Project Commitment Installment Payment (PCIP). This payment shall

equal 30% of the total Performance Based Budget times the ratio of the subject Project’s Committed Net Savings divided by the Total Program Net kWh Savings. Specifically, PCIP = (0.30) * ($950,000) * (Project’s Committed Net Savings/10,400,000 kWh) or $0.0274 per committed Project net kWh. PG&E shall pay Implementer once Implementer has submitted documentation to IOU Contract Manager, that is acceptable to PG&E, that the customer has made a project commitment. Total Project Commitment Installment Payments will not exceed [ ] without approval of IOU Contract Manager. The Project’s Committed Net Savings are net savings resulting from the signed agreement between the Implementer and the customer that describes the project/measures to be installed at the customer premise(s), including estimated energy savings and incentive payments.

5.4.2. Equipment Order Installment Payment (EOIP). This payment shall

equal 30% of the total Performance Based Budget times the ratio of the subject Project’s Net kWh Savings divided by the Total Program Net kWh Savings. Specifically, EOIP = (0.30) * ($950,000) * (Project


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Net kWh Savings/10,400,000 kWh) or $0.0274 per net kWh savings identified at time of equipment order or construction contract execution. PG&E shall pay Implementer once Implementer has submitted documentation to IOU Contract Manager acceptable to PG&E that that construction contract has been signed or at least 50% of equipment for Project (by cost) is ordered for the subject Project. Total Equipment Order Installment Payments will not exceed [ ] without approval of IOU Contract Manager. The Project’s Net kWh Savings are the savings based on the signed construction contract and/or equipment order. If the savings set forth in the signed construction contract and equipment order are different values, the greater savings value shall be used for the purposes of this section.

5.4.3. Project Installation Installment Payment (PIIP). The Performance-

Based Payment for each Installed and Verified Project shall equal 100% of the total Performance Based Budget times the ratio of the subject Project’s Net Installed and Verified kWh savings divided by the Total Program Net kWh Savings, less all previous Equipment Order Installment Payments and Project Commitment Installment Payments previously made by PG&E and associated with the subject Project. Specifically, PIIP = ($950,000) * (Project’s Net Installed and Verified kWh /10,400,000 kWh) – EOIP – PCIP, or $0.0913/ net kWh – EOIP – PCIP. Project Installation Installment Payments will not exceed $380,000 without approval of IOU Contract Manager. TProject’s Net Installed and Verified kWh are net savings resulting from installed equipment, verified according to PG&E-approved Quality Assurance/Quality Control Plan (QA/QC Plan) and approved by PG&E.

5.4.4. PG&E shall pay Implementer 100% of the Performance-Based

Payment once project is installed and operational consistent with requirements in Implementer’s approved QA/QC Plan and approved by PG&E, based on actual installed net savings

5.5. Payments for Committed Projects Compared to Installed Projects

5.5.1. PG&E will cease making Project Commitment payments if the

difference between the cumulative Project Commitments (kWh) and Installed and Operational Projects (kWh) exceeds 30% of the Total Program Net kWh Savings. With signed, written consent of the IOU Contract Manager, PG&E can modify this payment restriction to allow greater payments for Commitments relative to installed and operational installations.

5.6. Withholding of Payments for Inadequate Peak kW Savings


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5.6.1. Starting January 2007, PG&E will withhold 10% of the monthly

performance-based payments (PCIP plus EOIP plus PIIP) if the Implementer does not achieve 90% of the cumulative, installed and verified Peak kW savings specified in Exhibit F and if the ratio of cumulative kWh/ cumulative Peak kW exceeds 120% times the Total Program Net kWh Savings/Total Program Net Peak kW Savings. PG&E shall remit the payments withheld if the Implementer achieves cumulative, installed and verified, Peak kW savings or if the ratio of cumulative kWh/cumulative Net Peak kW is less than 120%. Upon IOU Contract Manager’s written approval, PG&E may, at its sole discretion, elect to release the withheld 10% of the monthly performance-based payment before Implementer fulfills the conditions set forth in this section.

Within sixty days after the Contract end date or Contract Termination,

whichever is earlier, PG&E will release a portion of the withheld 10% of the monthly performance-based payment if the Implementer achieves more than 90% of the cumulative, installed and verified, Peak kW savings goal. The portion released will be based on the installed and verified Net Peak kW savings so that GP&E will withhold the percentage of performance-based payments equal to the net kW savings (installed and verified) shortfall. For example, if the Implementer achieves 96% of Program Net Peak kW savings goal, PG&E will withhold 4% of the monthly performance-based payment and remit the remaining 6% to Implementer.

5.7. Customer Incentive Payments

5.7.1. If Implementer’s actual Customer Incentive Payments are less than the

Customer Incentive Payments forecast in Implementer’s Final, Approved Avoided Cost Calculator Workbook, attached as Exhibit E, PG&E shall pay actual Customer Incentive Payments, not forecast Customer Incentive Payments.

5.8. Contract Budget Reductions/Contract Termination

5.8.1. PG&E may reduce the overall contract budget and associated savings

or terminate the Contract. PG&E will consider several issues when deciding to reduce or terminate funding, including, but not limited to:

5.8.1.1. Actual Installed Measure Mix: On a quarterly basis, PG&E

will review the actual measure mix compared to the forecasted measure mix. If the actual measure mix varies substantially from the forecasted measure mix, particularly


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if the actual measure mix is less comprehensive than forecast, PG&E may reduce or terminate program funding.

5.8.1.2. Customer Satisfaction Metrics/Program Quality Metrics:

PG&E will consider program performance relative to approved Customer Satisfaction Metrics and Program Quality Metrics.

5.8.1.3. Coordination: PG&E will consider whether Implementer

satisfactorily, at PG&E’s discretion, fulfills its coordination obligations with PG&E’s own programs, other third party programs, and the Local Government Partnerships as set forth in Exhibit G of this contract and the approved Coordination Plan.

5.8.1.4. Inspection Results: PG&E will consider the number of

inspection failures and other inspection findings in assessing Implementer’s performance.

5.8.1.5. Timely and Accurate Reports: PG&E will consider reducing

or terminating program funding if PG&E determines that Implementer is not preparing timely and accurate reports.

5.8.1.6. Actual Installation Schedule Compared to Forecast

Installation Schedule: PG&E will consider reducing or terminating program funding if the actual installation schedule is slower than the forecasted installation schedule as contained in Exhibit E, the Final, Approved E-3 Avoided Cost Calculator Workbook.

5.8.1.7. Levelized Costs: PG&E will consider reducing or terminating

program funding if the actual program levelized costs are greater than the forecasted program levelized costs measured on a semi-annual basis as contained in Exbihit E, the Final, Approved E-3 Avoided Cost Calculator Workbook.

5.8.1.8. [Fill in Other Items As Appropriate]

5.8.2. If PG&E reduces funding or terminates the Contract, Implementer shall

provide PG&E with a status report of all Projects that are underway, including those Projects that have not reached the Commitment stage but have had some analysis performed. At PG&E’s discretion, PG&E may proceed with Projects that are underway or authorize funding for Implementer to complete Projects that are underway.


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5.9. Refund for CPUC Disallowance

5.9.1. If a CPUC decision or ruling disallows any program costs due to CPUC finding that Implementer acted unreasonably, Implementer shall return the amount due to PG&E within thirty (30) calendar days of the date Implementer receives written notice that the payment is owed.

5.10. Implementer shall send monthly invoices to:

[insert utility address]

6. Approval of Key Staff Changes

6.1. The following Implementer staff are considered “Key Staff” for purposes of successfully implementing this program. Implementer shall receive PG&E approval of changes to key staff, including any replacements of key staff:

Name Title

7. REQUEST FOR DATA 7.1. IOU will share customer-specific information, which includes but is not limited

to customer name, address, account number, billing information, usage history, and program participation history, on a case-by-case basis as resources allow. IOU may require customer-signed Authorization To Receive Customer Information or Act on a Customer’s Behalf form, a copy of which is attached herein in Exhibit B prior to releasing customer-specific information.

7.2. IOU may share energy efficiency program data as routinely reported to the

CPUC on an aggregated basis, including energy savings, unit accomplishments, and/or number of program participants, which may be reported by program, measure, end use, and/or other CPUC reporting categories. Request for program information that is not routinely reported to the CPUC will be reviewed on a case-by-case basis and provided only as resources allow. The above does not include any customer-specific information reported to the CPUC under PU Code 583.

8. PUBLICATION OF CUSTOMER INFORMATION

8.1. Implementer may not publish any reports or produce any marketing and promotional materials that may contain customer specific information, including but not limited to Customer’s name, logo, and Proprietary Information without:


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8.1.1. prior review and approval by Customer of the material to be published

or produced 8.1.2. obtaining a signed License to Use, approved by PG&E, from the

Customer. Implementer must submit signed form to PG&E Contract Manager.

9. NON-DISCLOSURE AGREEMENT

9.1. Implementer hereby agrees that it will require all of its employees, Subcontractors, and Subcontractor’s employees who will perform Work under this Contract to sign a non-disclosure agreement in the form attached hereto as Exhibit C, Non-Disclosure and Use of Information Agreement. Prior to starting said Work, Implementer shall promptly furnish the original signed non-disclosure agreements to PG&E.

10. IOU CONTRACT MANAGERS 10.1. Implementer designates ________________ (name) as Implementer’s

Contract Representative for all matters relating to performance of the Authorized Work under this Contract.

10.2. IOU designates _______________ (name) as PG&E’s IOU Contract Manager

for all matters relating to performance of the Authorized Work pursuant to this Agreement.

10.3. The Implementer or the Utility may change Implementer Contract

Representative or IOU Contract Manager at any time by providing written notice of the change to the other parties following protocol.

11. TIME IS OF THE ESSENCE 11.1. The Parties hereby acknowledge that time is of the essence in performing the

duties under this Agreement. Failure to comply with stated deadlines or milestones may result in termination of this Agreement, payments being withheld, or other program modifications.

12. EFFECTIVE DATE 12.1. This Agreement shall become effective on the later of the date that is signed

by both the IOU and Implementer.

13. ASSISTANCE IN MARKETING

13.1. PG&E agrees to provide the following assistance in marketing and/or customer enrollment:

[Insert any agreed-to assistance in marketing or customer enrollment during contract negotiation. PG&E does not guarantee that it will be able to provide


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Bidder-requests for assistance in marketing or customer enrollment. However, PG&E will consider Bidder’s request and discuss with Bidder either during Bid clarification or program negotiation phase of solicitation.]

13.2. Except as approved in writing by the IOU, Implementer may not use IOU’s name or logo on marketing materials for its program. Implementer further agrees not to state or imply to third parties that IOU has endorsed or approved Implementer or its work.

14. NON-EXCLUSIVITY 14.1. THE PARTIES AGREE THAT THIS CONTRACT DOES NOT ESTABLISH

AN EXCLUSIVE CONTRACT BETWEEN PG&E AND IMPLEMENTER. PG&E EXPRESSLY RESERVES ALL ITS RIGHTS, INCLUDING BUT NOT LIMITED TO THE FOLLOWING: THE RIGHT TO UTILIZE OTHERS TO PERFORM OR SUPPLY WORK OF THE TYPE CONTEMPLATED BY THIS CONTRACT; THE RIGHT TO REQUEST PROPOSALS FROM OTHERS WITH OR WITHOUT REQUESTING PROPOSALS FROM BIDDERS FOR WORK OF THE TYPE CONTEMPLATED BY THIS CONTRACT, AND THE UNRESTRICTED RIGHT BY PG&E TO RE-BID OR PERFORM ANY SUCH WORK.

15. CLAIMS SUBSTANTIATION 15.1. Implementer represents that it has adequately substantiated all claims made

as part of the Authorized Work according to the requirements of California and federal law. Implementer shall substantiate claims made in all program materials, including but not limited to: program descriptions, web sites, fact sheets, brochures, and advertisements (“Program Materials”). Claims include, but are not limited to, statements about the energy efficiency, safety, reliability, or performance of a piece of equipment or category of energy efficiency measures.

15.2. For each Program Material, Implementer shall identify all claims, and shall have written evidence and data to substantiate the claim. Implementer shall provide the claims and claims substantiation to the IOU Contract Manager upon submittal of the material for IOU review and approval. If IOU Contract Manager determines that the evidence or data that Implementer has submitted to IOU is inadequate to substantiate the claim, then Implementer shall either provide additional evidence or data, that in IOU’s sole discretion is adequate to substantiate the claim, or redraft or eliminate the claim so that the data and evidence, in the IOU Contract Manager’s sole discretion, adequately supports the claims made.

15.3. Implementer agrees to indemnify and hold IOU and its parent company

harmless from and against all liabilities, costs and damages arising out of or related to claims that are inadequately substantiated. Implementer further


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agrees to pay any judgment or reasonable settlement offer resulting from a suit or demand, and pay any reasonable attorney’s fees incurrent by IOU in defense of such a suit.

16. CONFIDENTIALITY

16.1. In the course of performing the services under this Contract, Consultant may have access to confidential commercial or personal information concerning, but not limited to, California residents, technological, ratemaking, legislative, and personnel matters, and practices of PG&E, its parent company, subsidiaries, affiliates, or members of the public. Consultant agrees not to disclose any such confidential information or otherwise make it available to any other person, including any affiliate of PG&E that produces energy or energy-related products or services, without the prior written approval of PG&E. Consultant shall implement and maintain reasonable security procedures and practices appropriate to the nature of the information, to protect any personal or confidential information from unauthorized access, destruction, use, modification, or disclosure.

17. NOTICES OR DEMANDS 17.1. Any written notice, demand or request required or authorized in connection

with this Agreement, shall be deemed properly given if delivered in person or sent by facsimile, nationally recognized overnight courier, or first class mail, postage prepaid, to the address specified below, or to another address specified in writing by a Party. Requests for contract amendments may be sent by e-mail. Notices shall be addressed as follows:


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IMPLEMENTER CONTRACT REPRESENTATIVE Name: Attention: ______________ Mailing Address: Street Address Telephone: Fax: Email: IOU CONTRACT MANAGER Name: Attention: ______________ Mailing Address: Street Address: Telephone: Fax: Email:

17.2. Notices shall be deemed received by the Contract Representative (a) if personally or hand-delivered, upon the date of delivery to the address of the person authorized to receive such notice if delivered before 5:00 p.m., or otherwise on the business day following personal delivery; (b) if mailed, three business days after the date the notice is postmarked; (c) if by facsimile, upon electronic confirmation of transmission, followed by telephone notification of transmission by the noticing Party; or (d) if by overnight courier: on the business day following delivery to the overnight courier within the time limits set by that courier for next-day delivery.

18. COMMISSION AUTHORITY TO MODIFY/REGULATORY REVIEW

18.1. This Agreement shall at all times be subject to such changes or modifications by the CPUC as it may from time to time direct in the exercise of its jurisdiction.

19. CONFLICT OF TERMS 19.1. Should a conflict exist between the General Conditions and the Specific

Conditions, the Specific Conditions shall control. Should a conflict exist between the Specific Conditions, General Conditions and the Attachments, the Specific Conditions or the Attachments shall control. Should a conflict exist between the Specific Conditions, General Conditions, or Attachments, and applicable federal, state or local law, rule, regulation, order or code, the law, rule, regulation, order or code shall control. Varying degrees of stringency among the General Conditions, Specific Conditions, Attachments, laws, rules, regulations, orders or codes are not deemed conflicts and the most stringent requirements shall control.


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EXHIBITS TO PG&E SPECIFIC CONDITIONS:

Exhibit A: Approved Labor Rates Exhibit B: Authorization To: Receive Customer Information or Act on a

Customer’s Behalf Exhibit C, Non-Disclosure and Use of Information Agreement. Exhibit D: Supporting Documentation Requirements Exhibit E: Final, Approved Avoided Cost Calculator Workbook Exhibit F: Monthly Forecast of Net Program KW Savings, Net Program

kWh Savings, Net Program Therm Savings. Exhibit G: Geographic Areas, Customers served for this Program

NOTE: License to Use and Access Agreement will not be attached as Exhibits to this Contract. These documents, if needed, will be prepared after Contract is executed.


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SPECIFIC CONDITIONS EXHIBIT D: Supporting Documentation Requirements

Supporting Documentation Requirements

The following supporting documentation is required for incentive payments:

For point of purchase programs, provide:

1. Number and type of products sold and incentive amount for each transaction; 2. Dates of each transaction; 3. Retailer name and location; 4. Savings for each measure; 5. Total value of discounts or incentives. 6. Method for ensuring that the product rebated through a point of purchase

activity is sold to a customer eligible for the point-of-purchase rebate and that the product remains in PG&E’s service territory. The IOU Contract Manager shall review Implementer’s proposed method, and Implementer agrees to make any changes requested by the IOU Contract Manager to the method.

7. Any specific customer characteristic that the program specifically targets (e.g. customer market segment)

For events at which products (such as low-flow showerheads or faucet aerators) are distributed free-of charge, provide:

1. Customer names and signed customer form approved by PG&E which limits how many free products one customer may receive.

2. a description of the event, including the date and location, and number of participants;

3. quantity of each product given away; 4. savings for each measure/product; 5. total value of products distributed 6. name, address and phone number of each customer receiving the distributed

product. 7. any specific customer characteristic that the program specifically targets (e.g.,

customer market segment)

For upstream incentives paid to manufacturers, distributors, or stores, provide: 1. recipient’s name, address and phone number; 2. number and type of products rebated; 3. savings for each measure/product; 4. amount and date of payment; 5. total number of incentives paid for each measure, and the cost per incentive. 6. method for ensuring that the measures for which manufacturers, distributors

or stores received an incentive is sold to a customer in PG&E’s service territory. The IOU Contract Manager shall review Implementer’s proposed


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method, and Implementer agrees to make any changes requested by the IOU Contract Manager to the method.

7. any specific customer characteristic that the program specifically targets (e.g., customer market segment)

For each incentive paid to customers or contractors (other than point of purchase programs), provide the

1. customer name, address, phone number, and account number, 2. the quantity of each measure incented 3. estimated demand and energy savings for each measure 4. the amount paid, and 5. the date the payment was sent 6. any specific customer characteristic that the program specifically targets (e.g.,


Implementer shall provide the following data for direct install projects: 1. customer name, address, account number and phone number 2. quantity of each energy efficiency measures installed or repaired 3. estimated demand and energy savings for each measure 4. amount of co-pay by customer 5. any specific customer characteristic that the program specifically targets (e.g.

customer market segment) 6. amount of incentive (if any) paid to the customer 7. date of installation

Implementer shall provide the following data for audits/site surveys:

1. customer name, address, account number and phone number 2. end-uses audited 3. estimated demand and energy savings potential if recommended measures

were to be implemented by customer 4. amount of co-pay by customer 5. any specific customer characteristic that the program specifically targets (e.g.


Implementer shall provide the following data for each training conducted. This section does not apply to Implementer’s internal training for Program personnel.

1. brief description of training 2. delivery method 3. list of materials provided to attendees 4. list and number of attendees 5. copies of materials provided to attendees (Materials need only be submitted

once.) 6. date and location of training


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Implementer shall provide a copy of each distinct marketing material produced, and

note the quantity of a given marketing material produced and the method of distribution.

Implementer shall retain individual completed customer applications, proof of

incentive payment, customer form indicating that customer has not received other incentives for the measure (described in section on Prevention of Double Dipping), as well as other supporting documentation pertaining to the performance of this Agreement or the Authorized Work for at least five years after the end of the contract term or receipt of final payment. These applications should be kept in a logical order (chronologically as a minimum standard) and provided to IOU its designee upon request.


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SPECIFIC CONDITIONS EXHIBIT E: Final, Approved Avoided Cost Calculator Workbook


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SPECIFIC CONDITIONS EXHIBIT F: Savings Forecast


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SPECIFIC CONDITIONS EXHIBIT G: Allowable Geographic Areas and Customers to be Served

by this Program


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OPTIONAL EXHIBITS TO PG&E SPECIFIC CONDITIONS: Exhibit A: Access Agreement (see:www.pge.com/3PEnergyEfficiencyRFP) Exhibit B: Authorization To: Receive Customer Information or Act on a Customer’s

Behalf (see: www.pge.com/3PEnergyEfficiencyRFP) Exhibit C: PG&E Non-Disclosure Agreement (see Exhibit 8 to the RFP) Exhibit D: License to Use (see: www.pge.com/3PEnergyEfficiencyRFP)





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Attachments to PG&E Specific Conditions (to be finalized during contract negotiations)

Attachment A-2: PG&E Avoided Cost Calculator Workbook (to be finalized during

contract negotiations) Attachment B: PY2004-05 CPUC Reporting Requirements [as specified by CPUC]

2006-2008 Energy Efficiency Programs Request for Proposal RFP-006-06-DJC

EXHIBIT 7: CONTRACTOR VALUES

2-60 (Rev 11/92)8 Materials

Pacific Gas and Electric Company Contract Values

PG&E places high value on our customers, employees, and shareholders, the environment, safety, continuous improvement; and conducting our business in an ethical manner. We

expect contractors working for PG&E to do the same. We will judge their performance, in part, on how these values are met in the course of working for us.

CUSTOMER RELATIONS: PG&E is committed to understanding the services that are

of value to our customers in an increasingly diverse society and providing those services safely, dependably, courteously, and at fair prices. Actions of our contractor affect our

customers' and the general public's perception of PG&E; therefore, we expect our contractors to conduct their work in this same safe, dependable, and courteous manner. ENVIRONMENT: PG&E is dedicated to being a leader in the energy industry with

respect to environmental issues. Environmental protection and enhancement is a fundamental corporate direction as PG&E recognizes that a sound environmental policy and sound business practices go hand in hand. PG&E expects its contractors to contributes to the success of maintaining our leadership in the environmental arena by conducting all aspects of work performed for PG&E in an environmentally sensitive manner which maintains and, when feasible, improves the quality of the environment.

SAFETY: PG&E is committed to maintain and promote job safety and health for our

employees, customers and the general public, and we expect contractors performing work for PG&E to do the same. We are committed to working with contractors who conduct

their work safely by providing adequate training and a safe work environment. CONTINUOUS IMPROVEMENT: PG&E includes among its corporate goals providing

its employees with fair compensation and the opportunity for fulfilling careers and individual growth. One way of accomplishing this objective is by continually improving our work processes in all aspects of our business. A major element of continuous improvement is employee involvement. We expect our contractors to be a part of this process by joining with PG&E in creating a work environment that encourages all

employees to become involved by sharing experiences, viewing other employees as a resource, recognizing and reinforcing behaviors that lead to work process improvements

and participating in collaborative efforts with PG&E to improve the work process. BUSINESS ETHICS: Integrity, honesty, professionalism, and ethical business conduct

are expected of all our contractors.


EXHIBIT 8

PG&E NONDISCLOSURE AND USE OF INFORMATION AGREEMENT

[This Page Intentionally Blank]

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NONDISCLOSURE AND USE OF INFORMATION AGREEMENT THIS AGREEMENT is by and between ______________________________ ("Company"),

________________________________ ("Undersigned") authorized employee of Company (together, Company and Undersigned are referred to as the “Recipient”), and PACIFIC GAS AND ELECTRIC COMPANY ("PG&E") on the date set forth below. Undersigned and Company agree as follows:

1. The Recipient acknowledges that in the course of performing services or work for PG&E, the Recipient

will be given access to technical information and materials including, but not limited to, information relating to drawings, maps, reports, specifications and records and/or software, data, computer models, and related documentation, which are owned by PG&E, its parent company, subsidiaries or affiliates, and/or owned by third parties and in the possession of or licensed to PG&E, and which constitute valuable, confidential and proprietary information, know-how, and trade secrets, belonging to PG&E, its parent company, subsidiaries or affiliates and/or third parties (collectively, “Proprietary Information").

2. In consideration of being made privy to such Proprietary Information, and of the contracting for the

Recipient’s professional services by PG&E, the Recipient hereby agrees to hold the same in strict confidence, and not to disclose it, or otherwise make it available, to any person or third party (including but not limited to any affiliate of PG&E that produces energy or energy-related products or services) without the prior written consent of PG&E. The Recipient agrees that all such Proprietary Information:

(a) Shall be used only for the purpose of providing services or work for PG&E; and (b) Shall not be reproduced, copied, in whole or in part, except as specifically authorized and in

conformance with PG&E's instructions when necessary for the purposes set forth in (a) above; and (c) Shall, together with any copies, reproductions or other records thereof, in any form, and all

information and materials developed by Undersigned therefrom, be returned to PG&E when no longer needed for the performance of Undersigned's services for PG&E.

3. The Recipient hereby agrees that any third parties owning any Proprietary Information are express third

party beneficiaries of this Agreement. 4. The Recipient hereby acknowledges and agrees that because (a) an award of money damages is

inadequate for any breach of this Agreement by the Recipient or any of its representatives and (b) any breach causes PG&E irreparable harm, that for any violation or threatened violation of any provision of this Agreement, in addition to any remedy PG&E may have at law, PG&E is entitled to equitable relief, including injunctive relief and specific performance, without proof of actual damages.

5. This Agreement shall be governed by and interpreted in accordance with the laws of The State of

California, without regard to its conflict of laws principles.

UNDERSIGNED: COMPANY

Signature Company Name

Name Signature of Authorized Agent of

Title Name

Company Title

Date Date

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Exhibit 9: Program Metrics

OBJECTIVE The performance of all programs will be evaluated by program metrics which can be

tailored to the particular program. Appropriate metrics will address issues described below:

1. Fulfilling Program/Contract Obligations:

a. Is program meeting energy efficiency/resource acquisition goals on or before forecasted schedule? If not, why not?

b. Is the program at or below forecasted spending relative savings? c. Is program fulfilling all other terms of contract?

2. Quality and Customer Satisfaction: a. Is program meeting “program quality” objectives? b. Is program generating excessive customer, contractor or regulatory

complaints? c. Are customer satisfaction scores acceptable?

3. Program Coordination: a. Is program fulfilling referral obligations? b. Is program providing timely information to the clearinghouse? c. Is program coordinating with PG&E Account Service Account Managers

on all managed accounts? d. Is program causing market obstruction (increasing barriers) for other

implementers operating in the market? 4. Other Performance Indicators:

a. How is program performance relative to other program performance in market? (Take into account fact that newer programs will need more ramp-up time to produce equivalent performance)

b. How is market performance relative to other market segments? Should more or less funding be shifted into or away from market to

achieve CPUC’s adopted energy targets?

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Exhibit 10 PY2004-05 CPUC Reporting Requirements

The following PY2004-05 CPUC Reporting Requirements documents are posted at

PG&E’s website at: www.pge.com/3PEnergyEfficiencyRFP

o Exhibit 9A to RFP -- PY2004-05 CPUC Energy Efficiency Groupware Application Program Report Workbook Version 2

o Exhibit 9B to RFP -- 2004 - 2005 CPUC Energy Efficiency Programs Monthly Report Instructions and Deliverables

o Exhibit 9C to RFP -- 2004 - 2005 CPUC Energy Efficiency Programs Monthly Report Narrative TOC

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Exhibit 11 2002 NAICS Code Segment Mappings

The 2002 NAICS Code Segment Mappings document is posted at PG&E’s website

at: www.pge.com/3PEnergyEfficiencyRFP

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