3.27.20 Toward a Common Lexicon + PAYS® Update
Updated: Aug 31, 2020
Hi PAYS® Pals, here's your weekly newsletter!
Toward a Common Lexicon when talking about Pay As You Save®
We are advocating that everyone use the term “Pay As You Save” and talk about “the Pay As You Save system” rather than the alternatives including the acronym "PAYS" when talking to virgin audiences. The term is self-explanatory and has a rigorous definition that ensures consumer protections. Ultimately we’d like all program authorizations to specify Pay As You Save®. We already have one!
Why not "On-bill", “tariff on-bill”, “inclusive financing”, or “PAYS” alone?
On-bill is too associated with loans and analogizing the two makes people think they understand PAYS when they really do not
Tairff on-bill – Is generic, technical, and completely opaque to a layperson. Moreover, TOB programs have none of the consumer protections embedded in Pay As You Save. We like to say all Pay As You Save programs are TOB, but not all TOB programs are Pay As You Save. It also includes the term “on-bill”.
"inclusive financing" - an important term but used alone is not self-explanatory
"PAYS" – (The newsletter name notwithstanding) is not self-explanatory and when said out-loud often gets confused with PACE which injects many mental biases right off the get-go that may be hard to overcome. It is fine for shorthand with the initiated or in longer written pieces so we’ll continue using it here as inside baseball.
Other useful terminology from correspondents in the field:
"Site-Specific Investment and Site-Specific Cost Recovery" - Holmes Hummel has found this useful when working with legislators who immediately shy away from including anything “®” in legislation. In addition, she’s found that describing the PAYS system as a mechanism for “atomizing the ratebase for site-specific investment and site-specific cost recovery” seems to immediately click with financial professionals and regulatory affairs folks, and has the added benefit of underscoring how it is NOT rate-basing the program since non-participants DO NOT subsidize participants.
"A market-rate system that is income agnostic" - this language seems to click for those who are sensitive about programs just for "low-income"
How to talk about the trademark
LibertyHomes has found that some commission staff and advocates mistakenly assume that because Pay As You Save® and PAYS® are trademarked that using the term and specifying the system is locking users into using a specific vendor. So it is important to emphasize upfront that this is not actually the case. Anyone who runs a program that meets the PAYS minimum requirements and includes all of the essential elements can use the trademark at no cost. License fees are only required if a program sponsor wants to use the PAYS intellectual property to save time and money in order to quickly set-up a program that has all of the essential elements including contract and legal language for agreements between all the various parties (utility, program operator, contractors, asset owners, asset users, etc.) Most utility programs adhering to the PAYS system have licensed IP from EEI or hired a licensed IP program operator.
If you haven't seen Curtis Wynn's speech at NRECA
you should at least know that he made a historic recommendation that all coops must become "trusted energy investors" on the member side of the meter and make sure all efforts are "inclusive", especially to the most energy burdened!
State and Federal level action on PAYS Legislation
Virginia passed and the governor signed SB754 allowing coops to use "on-bill tariff programs" for energy efficiency. Chelsea Harnish at the VA Energy Efficiency Council told us that the reason this bill is restricted to just coops and efficiency (instead of IOUS and solar) is that solar advocates were afraid that Dominion Virginia Power would use the establishment of on-bill tariff authority to become an even greater monopoly over solar deployment. Harlan has found some language in this bill that may restrict the implementation of PAYS so LibertyHomes is going to set up a meeting with some folks at VA's DMME and VAEEC to figure out who we need to talk to in order to mitigate this.
The Missouri Public Service Commission ordered (File No. EO 2019-0132) on December 11, 2019 that its approval of Evergy Missouri Metro's and Evergy Missouri West's (formerly Kansas City Power & Light) Missouri Energy Efficiency Investment Act programs was contingent on the Companies implementing a one-year Pay As You Save® pilot program with a budget of not less than $10 million or more than $15 million (p. 26) The order specified PAYS by name! (A shout out to Geoff Mark, and the folks at Renew Missouri who have been the driving force behind these developments for the last 5 years!)
Washington. In Dec. and Nov. of 2019 the Wendy Gurlitz at the Northwest Energy Coalition submitted testimony in both Avista and Puget Sound Electric Company’s rate cases in Washington recommending PAYS by name as a remedy to balance impacts of proposed rate increases. Avista and NW Energy Coalition have a settlement agreement pending commission review and approval in which Avista commits to offering some type of on-bill financing program.
Federal. Be looking out for the new USDA RUS RESP Rule to come out soon! The rule will stipulate eligibility more precisely and is a prerequisite for USDA to award RESP FY2020 funding. Once we have the updated rules for eligibility, LibertyHomes is hoping to ensure that these programs are oversubscribed by helping utilities figure out if they are eligible.