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Pay-for-Performance Efficiency Accelerates with Oregon Climate Action Order

Yesterday, Oregon Governor Kate Brown announced that she was ordering the Oregon Public Utility Commission (PUC) to work with the Energy Trust of Oregon to launch pay-for-performance (P4P) programs for energy efficiency beginning in 2019. The governor’s directive was part of an executive order designed to help Oregonians use energy efficiency to neutralize their carbon footprints and achieve net zero energy ready buildings as standard practice across the state. A second executive order is aimed at increasing the adoption of zero-emission vehicles.

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In addition, the executive order directs the Oregon Department of Energy and the Public Utilities Commission to support broad data sharing to inform energy efficiency policy. As data is the raw ore of innovation in energy efficiency, this is a crucial step toward enabling P4P markets.

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The new direction for efficiency in Oregon comes on the heels of P4P moves in other states, including New York and California, and is a sign that the national shift toward procurement of performance-based efficiency is accelerating rapidly. Pay-for-performance programs work by standardizing the measurement and calculation of energy savings at the meter and allowing businesses to compete to deliver savings to customers at the lowest cost and the best value. By focusing results instead of prescribed measures, P4P drives innovation as companies work to develop new technologies and creative business models to save energy at scale. Ratepayers, meanwhile, are assured that all incentives for energy efficiency are actually yielding savings, and customers benefit from better offerings and incentives that make efficiency more affordable.

In New York, NYSERDA, a public benefit corporation tasked with promoting sustainable energy in the state, began a pilot P4P project earlier this year as part of New York's Reforming the Energy Vision (REV) initiative. Meanwhile, PG&E, the largest public utility in California, has already completed an initial residential P4P pilot and has put out a request for aggregators to join a much larger second phase that includes up to $20 million available for customer rebates.

To lay the groundwork for Oregon's P4P program, Energy Trust of Oregon will be rolling out a new statewide energy efficiency data management platform in 2018. Already a leader in data-driven program design, Energy Trust’s new platform will allow it to evaluate and optimize its existing program performance in real time and develop actuarial data that will aid in the design of P4P. With major energy efficiency firms like CLEAResult, ECOVA, and ICF already deploying programs from Portland offices, Oregon stands to further reinforce its reputation as a national leader in the field of energy efficiency.

To learn more about how Open Energy Efficiency is helping support pay-for-performance programs, and how our platform is working for aggregator businesses who will be participating in these exciting new markets, contact us for a demonstration of the OpenEEmeter platform.