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E-M:/ [Fwd: Urgent request for Energy Efficiency in MI]

Enviro-Mich message from Phil Shepard <shepard@acd.net>

-------- Original Message --------
Subject: 	Urgent request for Energy Efficiency in MI
Date: 	Thu, 16 Dec 2004 12:05:44 -0500
From: 	Phil Shepard <shepard@acd.net>
To: 	o2-michigan <o2-michigan@lists.riseup.net>

[Stanton attachment deleted due to restrictions of listserver; available on request.]

Dear Energy Efficiency Advocate,

The Michigan Public Service Commission recently issued a very significant order in a Detroit Edison Rate Case (U-13808). The order creates an excellent opportunity to encourage the Detroit Edison Company (Edison) to implement a new kind of energy efficiency program called PAYS®. "PAYS®" (or "Pay-As-You-Save™") is the legally registered trademark for a new and elegant financing mechanism designed by Harlan Lachman and Paul Cillo of The Energy Efficiency Institute. Detailed information is available from the non-profit PAYS America website <www.paysamerica.org> (www.paysamerica.org). PAYS® is a unique and powerful approach to developing a vibrant market for cost effective energy efficiency measures. It can do even better for energy efficiency what the home mortgage has done historically for home ownership: make it available to everyone, regardless of income level, while actually saving money on utility bills from the start.

We will explain more below, but first, and this is very urgent, WE NEED YOUR HELP. The first step in making PAYS® a reality in Michigan is to convince the PSC and Edison that there is strong support for it. So, we urge you to join us by sending a letter that communicates your desire that a PAYS® program be implemented by Edison in response to the ruling in Case No. U-13808. Getting Edison to form such a program would set an important precedent for Michigan’s other utilities to do the same.

Below, we review the Commission Order, what the Letter needs to contain, to whom it should be sent, and related matters, and explain the essential PAYS® concept.

Commission Order

The Order says:

"Finally, the Commission will not direct Detroit Edison to conduct any particular program beyond that already discussed above. However, the Commission stands willing to approve such a tariff [a true PAYS®tariff], should Detroit Edison follow up on the Staff's suggestion. The Commission finds that implementation of a PAYS® tariff could bring a competitive advantage to those energy suppliers willing to undertake such a program. ACCORDINGLY, THE COMMISSION DIRECTS DETROIT EDISON TO MEET WITH INTERESTED PARTIES WITHIN 120 DAYS FROM THE DATE OF THIS ORDER TO DISCUSS THE IMPLEMENTATION OF A PROGRAM CONTAINING THE ESSENTIAL ELEMENTS OF THE PAYS® CONCEPT. Detroit Edison should include any tariff proposal for which there is substantial agreement in its next general rate case application.

... [from Commission's FINDINGS paragraphs]
d. Detroit Edison should be directed to meet with interested parties to discuss the implementation of a program containing the essential elements of the PAYS® concept . . . . DETROIT EDISON SHOULD INCLUDE ANY TARIFF PROPOSAL FOR WHICH THERE IS SUBSTANTIAL AGREEMENT IN ITS NEXT GENERAL RATE CASE APPLICAITON. The company should also be directed to file a report with the Commission no later than March 15, 2005.

{Caps are ours.}

To effectively seize the opportunity this order presents, a significant number of energy experts and community advocates need to declare in writing their interest in participating in the discussion of PAYS® implementation with Edison.

Letter Details


The letter should state that

1. You and any relevant group you represent are very interested in the Commission Order in Case No. U-13808 regarding a PAYS® program.
2. You believe the PAYS® system can make an enormous difference for Michigan residents, businesses and taxpayers by creating a marketplace where customers want to buy and pay for cost effective efficiency products.
3. You or your group want to be part of collaborative effort to be held as soon as possible to develop “substantial agreement” on a tariff proposal for “a program containing the essential elements of the PAYS® concept.”

4. It is important that the Commission used the PAYS® trademark. Please use it in your letter and indicate that you understand the three key elements of PAYS® noted below.
5. If you or your group can commit to attending all meetings please note this in your letter. If you cannot take on actively participating yourselves, please designate one of these three people as your representative - Phil Shepard, David Gard, and Rev. Charles Morris. If you would like to participate but are unsure (e.g. due to possible scheduling conflicts) please indicate that you would like one of us to represent you if you are not able to attend.

(If you have difficulty getting "PAYS®" or "Pay-As-You-Save™" to appear as such in your letter, try copying from this email to your clipboard and pasting into the letter. Alternatively, you may use "PAYS(R)" as the nearest representation of "PAYS®".)

Letter Destination

The letter should be sent to:

Carolyn MacKool, Energy Assistance Manager
The Detroit Edison Company
3200 Hobson St.
Detroit, MI 48201

email: mackoolc@dteenergy.com
voice 313-256-6601
fax: 313-577-7229

Please send copies of the letter to:

Sandra Philpott-Burke, Supervisor
Service Quality Section
Michigan Public Service Commission
P.O. Box 30221
6545 Mercantile Way, Suite 7
Lansing MI 48911-5990

and to

George Stojic, Director
Engineering & Service Quality Division
Michigan Public Service Commission
P.O. Box 30221
6545 Mercantile Way, Suite 7
Lansing MI 48911-5990

You may send an additonal copy to:

Jim Padgett, Governmental and Regulatory Affairs
The Detroit Edison Company
2000 2nd Ave
Detroit, MI 48201

We strongly urge that you send or fax hardcopy letters to MacKool. You may also email a courtesy copy to her. Please email your letter as well to Phil Shepard (shepard@acd.net) so we may keep track of responses and your choice regarding representation on the collaborative.

If it is at all possible for you to get your letter out before Christmas, we strongly urge you to do so. Otherwise, please send your letter as soon as possible after Christmas and call MacKool before Christmas to announce your intention to submit a letter of interest. We will contact Edison to convene the PAYS® collaborative early in January.

PAYS® Concept

With the PAYS® system, building owners or their tenants purchase and pay for money-saving energy efficiency products wtih no up-front payment and assume no debt obligation. Those who benefit from the savings pay for these products through a tariffed charge on their utility bill, but only for as long as they occupy the location where the products are installed and only for as long as the product functions. The monthly charge is set so that it is significantly lower than the product’s estimated savings and there are immediate net savings. The charge remains on the bill for that location until all costs are recovered. Like a loan, PAYS® allows for payment over time, but unlike a loan, the PAYS® obligation ends when occupancy ends or the product fails. PAYS® creates a marketplace in which people want to buy and pay for energy efficiency.

PAYS® has three key elements:
a) A tariff that assigns repayment of permanent measures to the meter location;
b) Billing and payment through a charge on the distribution utility bill with disconnection for non-payment; and c) Independent certification that the products and installations are appropriate and that estimated savings will exceed payments.

The attached excerpt from testimony of Thomas Stanton, PSC staff, further explains the concept and helps to give a feelng for the context. Additional material on the concept is available at www.paysamerica.org . Shepard will also supply upon request e-copies of i) testimony at a PSC hearing on PAYS® and its benefits, and ii) a conference paper that updates the discussion and addresses some questions of possible scope. Both of the latter are written particularly for the "lay" or non-expert reader.

In addition, Harlan Lachman (802-879-8895 or 802-238-7331, cell) and Paul Cillo (802-472-6222) invite you to call them with any relevant concerns. The letter campaign coordinators, Phil Shepard and David Gard (contact info below), wish to extend the same invitation.

We thank you profusely for your assistance in this matter.

For the Michigan PAYS® Coalition, we are,

Philip T. Shepard, Professor Emeritus, MSU
President, ESB Consulting, Inc.

David Gard
Michigan Environmental Council

-- Phil Shepard shepard@acd.net 517-332-0761

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