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Good Program Governance needs Good Program Management Systems

April 05, 2021

As Program Administrators, we are responsible for the flow of millions of ratepayer-funded incentive dollars between the utility and eligible participants. Typically, we focus on essential program metrics such as annual spending, the amount of energy saved, and other corporate goals. However, we should also consider the internal controls to ensure these incentive dollars are correctly spent. While it is not feasible or advisable to review each incentive payment for an LED lamp, technology can help implement a governance program. Think about each of the decision steps a customer incentive application goes through to reach final approval. An application is received. Is the customer information entered correctly? Is the new equipment documentation present? When talking about the term "governance," we consider the internal guidelines that direct the program's workflow processes and the decision-making surrounding it.

carbon-reduction-programs-bannerProgram governance, in this case, means that roles and responsibilities are clearly established between the various decision-making points. Separation of duties is a good first step. The person reviewing the incentive application for completeness is not the same person conducting the onsite inspection of equipment. Separation of duties can also mean that your program management solution automatically verifies data such as customer account number and model number before it is sent to inspection. When it is time for payment, most companies have a delegation of authority hierarchy for approving expenditures. You would not want your CEO's approval for a $10 incentive. Establishing approval levels differentiated by dollar amount is not only good governance, but it can also expedite incentive payments. Consider how simple or complex the customer application. A residential HVAC project may be approved by a manager or team lead. However, a large incentive for a commercial project may need the approval of the company's executive.

Program governance is not meant to micro-manage down to the lowest level of employee. It is intended to provide an overall structure as to how business is operated and conducted. Fortunately, as stated earlier, technology can give us a helping hand. We can design our workflows in a system like eTRACK+ where duties are separated, and incentive applications cannot proceed to the next step without action by the responsible employee. Electronic incentive invoices can be routed to the person with the appropriate approval level. No more having to print invoices and hand carrying them from manager to manager to get signatures. A well-thought-out and designed governance structure ensures effective management and accountability and gives the program administration team the decision guidelines to operate within.

Written by - Michael Stockard
Michael Stockard is an independent consultant at Stockard Energy Advising and is a member of the Advisory Panel at ANB Systems. Michael has over 40 years of experience in the design and implementation of demand-side management programs.

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