(A) An application to commit a mercantile customer's energy efficiency program, or a customer's combined heat and power system or waste energy recovery system, to its electric utility's programs, pursuant to division (A)(2) of section 4928.66 of the Revised Code, may include a request for an incentive payment based on payment levels established in the electric utility's portfolio plan, or a commitment payment for behavioral programs, combined heat and power systems, waste energy recovery systems, or other payment for efficiency savings that do not qualify for an incentive payment, or an exemption from the cost recovery mechanism set forth in rule 4901:1-39-06 of the Administrative Code. Such application shall be filed pursuant to the requirements set forth in paragraph (C) of this rule. Alternatively, an application for an incentive payment, commitment payment, or cost recovery mechanism exemption may be combined with any other reasonable arrangement, approved pursuant to Chapter 4901:1-38 of the Administrative Code, if such reasonable arrangement contains appropriate measurements and verification of program results.
(B) In meeting its energy efficiency and peak-demand reduction benchmarks, an electric utility shall include mercantile customer energy efficiency, peak demand reduction, combined heat and power, and waste energy recovery programs implemented on mercantile customer sites where the mercantile program is committed to the electric utility.
(1) For energy efficiency programs, an electric utility may count the programs' effects resulting in energy savings and coincident peak-demand savings towards its energy efficiency requirements and peak demand reduction requirements.
(2) For demand response programs, an electric utility may count demand reductions towards its peak-demand reduction benchmarks by demonstrating that either the electric utility has reduced its actual peak demand, or has the capability to reduce its peak demand and such capability is created under either of the following circumstances:
(a) A peak-demand reduction program meets the requirements to be counted as a capacity resource under the tariff or capacity auction of the regional transmission organization in which the electric utility is a member and which has been approved by the federal energy regulatory commission.
(b) A peak-demand reduction program equivalent to a regional transmission organization program, which has been approved by the commission.
(3) A mercantile customer's energy savings and peak-demand reductions shall be presumed to be the effect of a demand response, energy efficiency, or peak-demand reduction program to the extent they involve the replacement of functioning equipment. If the mercantile customer's program involves the replacement of non-functioning equipment or an initial installation of new equipment, the electric utility may count the savings based on the efficiency of the replaced equipment, if any, but may provide a financial or rate exemption incentive based only on the reductions in energy use and peak demand that exceed the reductions or levels that would have occurred had the customer used standard new equipment or practices where practicable. However, nothing in this section prohibits the electric utility from compensating a mercantile customer for the administrative costs and inconvenience of undertaking the commitment process, in the form of a commitment payment. Electric utilities may make an alternative demonstration, subject to commission approval, that mercantile customer energy savings or peak demand reductions are eligible to be counted toward the electric utility's statutory requirements.
(4) Inclusion of all such mercantile customer energy efficiency and peak demand reduction programs shall be subject to commission approval and subsequent verification through the annual performance verification process, pursuant to rule 4901:1-39-05 of the Administrative Code.
(C) A mercantile customer may file, either individually or jointly with an electric utility, an application to commit the customer's demand reduction, demand response, or energy efficiency programs or the output of the customer's combined heat and power system or waste energy recovery system that have been implemented in the previous three years for integration with the electric utility's demand reduction, demand response, and energy efficiency programs, pursuant to division (A)(2) of section 4928.66 of the Revised Code. Such application, if filed individually, shall be filed no later than December thirty-first of the calendar year following the end of the three-year period. However, such applications that are filed jointly shall be filed no later than March thirty-first of the year following the individual application deadline, but only if the mercantile customer commitment agreement with the electric utility was executed by the individual filing deadline.
(1) Any such application filed in accordance with the automatic approval template published by the commission shall be deemed automatically approved unless suspended by order of the commission or an attorney examiner within sixty days of the filing of the application.
(2) Commitment of a mercantile customer's behavioral energy efficiency program that is made pursuant to a commitment payment shall be counted by the electric utility for one year. Subsequent annual applications may be made if the behavioral program continues. After five consecutive years of approved commitment payment applications, the energy efficiency savings shall be counted as permanent by the electric utility, and no additional payments will be made to the customer. If the energy savings levels vary from year to year during the five year period, the lowest of the energy savings levels shall be counted as permanent by the electric utility, and no additional payments will be made to the customer.
(3) No exemption from an energy efficiency cost recovery rider granted pursuant to an automatic approval shall extend more than one year unless the mercantile customer, or the electric utility on behalf of the mercantile customer, provides an annual update to staff on such form as published by the commission. The length of rider exemption shall be determined by the use of the benchmark comparison method.
(4) An application to commit a mercantile customer's demand reduction, demand response, or energy efficiency program to the electric utility that is not filed in accordance with the commission's automatic approval template, shall not be deemed automatically approved. Such an application shall address the following areas:
(a) Coordination requirements between the electric utility and the mercantile customer with regard to voluntary reductions in load by the mercantile customer, which are not part of an electric utility program, including specific communication procedures.
(b) Grant permission to the electric utility and staff to measure and verify energy savings and/or peak-demand reductions resulting from customer-sited projects and resources.
(c) Identify all consequences of noncompliance by the customer with the terms of the commitment.
(d) Include a copy of the formal declaration or agreement that commits the mercantile customer's programs for integration, including any requirement that the electric utility will treat the customer's information as confidential and will not disclose such information except under an appropriate protective agreement or a protective order issued by the commission pursuant to rule 4901-1-24 of the Administrative Code.
(e) Include a description of all methodologies, protocols, and practices used or proposed to be used in measuring and verifying program results, and identify and explain all deviations from any program measurement and verification guidelines that may be published by the commission.