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Payment schedule and calculations

Incentive payments are made in two installments: an Installation Payment is made after a project is installed and the Installation Report has been approved; a Performance Payment is made after a project's measurement and verification activities are complete and the Savings Report has been approved.

The Installation Payment is equal to 40% of the project's total incentive amount (as documented in the Project Authorization). Therefore, using the standard incentive rates, the formula for calculating the Installation Payment is as follows:

    Installation Payment = 0.4 x [(total estimated peak demand savings x $175) + (total estimated energy savings x $0.060)]

The Performance Payment is based on a year's worth of verified energy and demand savings and may be up to 60% of the total, contracted incentive amount. Using the standard rates, the formula for calculating the Performance Payment is as follows:

    Performance Payment = [(total verified peak demand savings x $175) + (total verified energy savings x $0.060)] - Installation payment

A Project Sponsor with a project that uses only deemed savings may submit both the Installation Report and Savings Report at the same time, since no M&V activities are required after the installation of the measures. For these projects, the Installation Payment and Performance Payment will be combined into one payment.

Under no circumstances will Energy CenterPoint Energy make a total incentive payment (that is, the sum of the Installation and Performance Payments) that is more than 100% of the total estimated incentive amount specified in the Project Authorization. If, however, measurement and verification activities indicate that the total actual savings are less than the total estimated savings, the total incentive payment may be less than the total payment specified in the Project Authorization.

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