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Task 6: HELIX Operating Framework Governance Structure andOperational PlanSeptember 5, 2017Governance Approach OverviewThe HELIX Governance Team is of the opinion that, at this time in the development of HELIX, it would bepremature to decide on the eventual structure, ownership model, financial arrangements andsuccession plan for HELIX. Given that the program is in its infancy, we need more time and experienceto address the many unknowns before recommending a well-informed proposal for governancestructure and an operation plan. Once HELIX has been piloted, additional conversations with interestedparties have been undertaken, and possible financial models have been vetted, there will be moreinformation available to make a firm recommendation. In the meantime, the Governance Teamrecommends the following approach: Proceed with the implementation of the HELIX project as planned through at least the grantperiod (December 2018), while considering a no-cost DOE grant extension if necessary tocomplete testing and prove viability;Establish and operate HELIX as a project of NEEP and then transition HELIX into a NEEPsubsidiary until the database can establish financial viability determined, andIn the process, gain valuable experience operating the HELIX as a subsidiary to determine thebest viable ownership, governance, operational and financial business model arrangement inthe future before making any final decision to spin off HELIX from NEEP.Based on this approach, the Governance Team recommends a three-phase approach, including thefollowing phases:1. Phase 1: HELIX as a Project of NEEP until end of U.S. DOE grant, Dec. 2018, or June 2019 with anextension of the grant2. Phase 2: HELIX as a Subsidiary of NEEP, with the transition to a subsidiary starting during 20193. Phase 3: Undetermined Future HELIX Structure, but likely after 2020 or 2021FIGURE 1. HELIX PHASES NEEP ProjectPhase 1 2017-2019 NEEP SubsidiaryPhase 2 2019 - 2020 or 2021? Undetermined Future StructurePhase 3 After 2020 or 2021?This memo summarizes the current governance andoperations arrangement, outlines the subsidiarystructure and elements and begins to ask questionsabout the ultimate structure for HELIX. As the HELIXproject matures, we will need to add and attempt toanswer questions and fill in the blanks that will help usaddress the question of the ultimate HELIX governancestructure and operational arrangement.1
Subtask 6.1 – HELIX Governance and Ownership StructureThe background for the HELIX governance and ownership structure elements come out of the series ofmemos researched and written by the Vermont Law School. . This material was used to inform theHELIX Governance Team’s discussions and proposal to stage HELIX governance and operations throughits project, subsidiary and ultimate spin-off structure phases, as discussed above.The HELIX governance structure presented below provides framework details for the “Project Phase”and “Subsidiary Phase” of HELIX. We expect that experience gained through each of these initialtransitional phases will then inform what the ultimate spin-off structure looks like. Until we gain moreoperational experience, we think it is premature to frame out what the ultimate structure will look like.However, to help think about those ultimate governance elements, we have included an initial set ofquestions that should be added to as HELIX evolves. The Governance Team will continue to follow theprogress of HELIX and update these recommendations in the future. Eventually, the Governance Teamand NEEP staff under direction of the NEEP Board will make the final approvals of the governancestructure and operating procedures outlined below and developed in Task 11.HELIX Governance Structure#12ElementStructureGrant Awarder 34NEEP Board ofDirectorsHELIX AdvisoryCommitteeDescription/NotesPhase 1: HELIX ProjectGrant-supported project of NEEPU.S. DOEUltimate project oversightState of Vermont (Public Service Department, or PSD) is HELIXgrantee, and answers to DOEThe NEEP Board of Directors answers to the PSD for the HELIXprojectNEEP staff answer to NEEP Board of Directors Authority over HELIX project (during both the Project and SubsidiaryPhases) until such time in the future when HELIX is ready to spin offand become a financially viable, self-sustaining entity Seeks guidance and direction from Advisory Committee Advisory and consultative resource to the project Information sharing & coordination Supports NEEP Board of Directors with project advice andconsultation until HELIX Subsidiary with its own Board of Directorsis formed May continue to advise the HELIX Subsidiary Board of Directors aswell as the ultimate entity, depending on the makeup and interestfrom these future entities and composition of the groups May be drawn from to form Subsidiary Board of Directors Members:o State Energy Officeso Utilities/Program Administratorso MLS Systems2
rganizationalStructure 8Subsidiary Elements Description/Noteso Local/state Realtorso National Association of Realtorso Local/state appraiserso Appraisal Instituteo Data Aggregators (not currently, but should consideradding)NEEP staff ultimately responsible for oversight of grantdeliverables to U.S. DOEVermont Department of Public ServiceVermont Energy Investment CorpEnergy Futures GroupSustainable Real Estate Consulting ServicesVermontWise Energy ServicesVermont Law SchoolA3P StrategiesClearly EnergyState Energy OfficesNASEOU.S. DOECSRA (DOE consultants)MLS SystemsRealtorsAppraisersData AggregatorsSoftware ProvidersClean Energy AdvocatesPhase 2: HELIX SubsidiarySubsidiary of NEEP (the “Parent”)Owned in whole by NEEPAs the parent of the subsidiary, the NEEP Board has the ultimateresponsibility and authority; if they have power to createsubsidiary, then they have the power to spin off.As an entity formed with federal funding, the structure mustcomply with any federal rules pertaining to products created withfederal funds501(c)3 non-profit, following NEEP’s statusMaintaining non-profit status provides multiple benefits asoutlined by Vermont Law School in 4/6/17 Task 4.5 MemoFurthers the Parent’s non-profit purposes and missionRelated business activity, consistent with Parent’s purposeSubsidiary benefits from Parent’s non-profit status (i.e., notsubject to federal income tax)3
#Element 9HELIX Subsidiary Boardof Directors Description/NotesWith separate Boards of Directors, both the Parent’s andSubsidiary’s Boards can be protected from debts and liability, withproper corporate separateness establishedSubsidiary can attract separate grants and contributions that theParent cannotNEEP can financial supporting the subsidiary and associatedoperational costs, legal fees, sales and marketing, IT costs, etc.,and will need to determine adequate funding.Subsidiary’s staff and board can have separate expertise fromParent’s staff and boardCan ease future transferring of ownership to employees oranother partyParent approves Articles of Incorporation and Bylaws and anyfuture amendmentsParent appoints Subsidiary Board of Directors and has right toremove any without cause at any timeParent and Subsidiary maintain separate books, accounts, minutes,tax returns, etc.Staff can be shared between Parent and SubsidyNet earnings from Subsidiary can be transferred to the Parent as acontributionParent can provide management, administration, accounting andstaffing services to Subsidiary at cost or lessParent can make contributions to Subsidiary as debt that can beforgiven later if desiredBased legal/720.pdfAppointed by the NEEP Board of DirectorsShould be separate individuals from NEEP Board who have specificexpertise that can benefit HELIXReports to NEEP Board of DirectorsOversees management and financial oversight of HELIX Databaseand operationsPossibly comprised of representative sample of the followingcategories, many of which could be overlapping from the currentAdvisory Committee:o NEEPo Stateso MLS Systemso Data Aggregatoro Utility/Program Administratoro Realtorso Appraisero Lendero At-LargeNumber of seats for each representative class to be determined4
#10ElementHELIX Subsidiary BoardRole 11HELIX Membership 12Executive Director orManager13Data Aggregation Firm14Staff Description/NotesEqual votes per Board memberNeed to establish conflict of interest provisionsPrimary role is to oversee HELIX operations with a financial andstrategic perspective and to determine the ultimate ownershipand structure of the HELIX databaseCreates vision and missionSets policy direction and ensures procedures are in placeDetermines membership classes and any associated feesWill consider other possible initiatives for the subsidiaryAs needed, committees will help carry out the activities of theorganizationIn order to manage the HELIX Database, the Board will either:1. Hire an Executive Director or Manager; or2. Contract with a data aggregation or other firm.The Executive Director or partner firm is given a clear scope androle as well as limits about what she/he can undertake whileanswering to the HELIX Board of DirectorsHires and fires Executive Director or firmMaintains ownership of HELIX Database and related assetsRecommends if/when to spinoff, dissolve, or sell HELIX and itsassetsOpen to any entity providing HELIX services, using HELIX orsupporting the existence of HELIXMembership Classes:o HELIX Providerso HELIX Userso HELIX SupportersAnnual membership fee, varies by classProvides access to HELIXBenefits of membership:o HELIX accesso Discounted user feeso Vote for Board representativeo Eligibility to run for Board seatExecutive Director/Manager is hired/fired by the HELIX BoardServes at the pleasure of the HELIX Board to carry out their vision,mission, policy direction and procedures guidanceHires and fires staff and consultantsManages all staff and the day-to-day operation of HELIXSelected by the Board or Executive DirectorContract arrangement to operate the HELIX databasePerformance-based arrangement in order to maintain relationshipHired and fired by Executive DirectorAnswer to the Executive Director5
FIGURE 2. PROJECT GOVERNANCE STRUCTUREFIGURE 3. SUBSIDIARY GOVERNANCE STRUCTURENEEP Board ofDirectorsNEEP Board ofDirectorsHELIX SubsidiaryBoard ofDirectorsHELIX AdvisoryCommitteeClearly EnergyProject Staff &ConsultantsClearly Energy6Project Staff &Consultants
HELIX Ownership StructureThe proposed ownership structure of HELIX for each of the three phases is presented below, along withsome key questions that will need to be addressed as HELIX moves through its ownership phases.#TimeframePhase 2017-20191Phase 2019-2020?2Description/NotesKey QuestionsPhase 1: HELIX Project1. How does HELIX relate to other energy auto-pop During the term ofefforts currently under development (e.g., Pivotal inthe DOE award, NEEPN. Carolina, LBNL’s PV Auto-Pop, California’s efforts,will retain ownershipetc.)?rights and oversight2. What is the interest that data aggregators have inHELIX?a. Data accessb. Partnershipc. Financiald. Ownership3. What are other possible revenue models for HELIXand other sources of revenue?4. How much will HELIX cost to run and what is thecapital needed? Task in work plan. Develop businessplan/budget in Q3 2018.5. Can we include eventual customers as beta testers? Phase 2: HELIX Subsidiary1. How can we best determine the value of HELIX inAs HELIX becomesmore independentthe real estate marketplace and by jurisdictions withand the futurean interest in promoting energy information?developmenta. What might they be willing to pay for thisbecomes clearer,data?HELIX is setup as a2. When HELIX is spun off, what other products orwholly-ownedservices can it provide to benefit the customer basesubsidiary of NEEPthat it has developed and further its mission impact?The ultimate3. What are the operational costs? What are ourstructure post-NEEPbreak-even costs? Parse out total costs, perwill need to becustomer costs, data point costs ? (Q1 2018 startdetermined beforefiguring out).spinning off.4. Design, develop and figure out how to pay for HELIXNeed to ensure HELIXand reach out to potential customers/funders; whois self-sufficient andare our potential clientsfinancially viable5. If HELIX isn’t making money by end of grant period,before spun off.then how long is NEEP willing to keep subsidizing?6. Is the expectation that HELIX will be financially selfsufficient by the end of the award? If so, thereshould be a written plan for getting to that point. Ifnot, there should be a written plan forcontingencies.7
7. What is the revenue model if HELIX is not selfsufficient at end of grant period or can’t findanother funding source?8. What happens if there is no future viability? Winddown procedure, disposition of data that had beencollected? How far to get into contingency details?Phase Post-2020?3 Phase 3: Undetermined Ultimate HELIX Structure1. When is the right time to ultimately spin off HELIXTiming and structurefrom NEEP?to be determined by2. What organizations and ultimately who is interestedHELIX Subsidiaryin HELIX? What benefits do they derive? How muchBoard of Directors,might they pay for this product/service?then approved byNEEP Board ofDirectorsPremature todetermine timing andultimate structure atthis pointIn order to avoidfuture potentialconflict, the NEEPBoard should make astatement early on ofits intention to spinHELIX off at theadvice of the HELIXBoard. This couldbecome particularlyimportant if/whenHELIX starts to makemoney.8
Subtask 6.2 – HELIX Operational PlanThe Operational Plan should be developed as the HELIX Database is field-tested and decisions are madeabout who will ultimately own and implement the system in the field post-NEEP. If HELIX is to beoperated by a data aggregation firm, operations should follow their existing arrangements andprocedures. If HELIX is going to be maintained by staff of a new non-profit organization, an entire newoperational plan and model will need to be developed. The Operational Plan shall remain a work inprogress until HELIX is more fully developed.HELIX Operational Plan#Element1Revenue Model2Members3Populating the Databasewith Data4Reporting5Revenue ModelDescription/NotesPhase 1: HELIX Project Pilot operations and test procedures Avoid charging during project phase until HELIX works andvalue is proven Maintaining non-profit status will allow for receiving grantsand general support in the future, if needed Need to understand the value HELIX brings to the market andstakeholders to determine the best revenue model. Theoperations plan will help create independence and determinehow to proceed Explore interest in users becoming members of HELIXo If interest, could offer a free membership to utilities,states and others who choose to support theexistence of HELIX Responsibility of ClearlyEnergy initially While the HELIX structure will be initially established andpopulated, in order to maintain the value of the HELIXDatabase, arrangements to ensure timely, clean and accurateenergy data will be paramount Data consistency and privacy provisions will need to beestablished and maintained for each state When a new score is entered into the database for a specificaddress that already has a score on file, the old score willneed to be archived. Users should be able to access archivedscores to see improvements made over time by address. Regular reports on data in/out/used to the HELIX team,advisory committee, NEEP Board and othersPhase 2: HELIX Subsidiary Limit charging fees until HELIX operations and the value of itsdata is proven Consider offering basic data values for free (e.g. HEScore) butthen charge for access to the more detailed data (e.g.,certifications or estimated annual energy use) or considerscaling per user or by the amount of data entered. Answer inearly 2018, post-pilot testing. Explore charging for support, membership and use9
oo 6Members 7License for Data Access 8Licensees Sales of licenses could generate revenueOrganizations could pay an annual license fee for alltheir memberso Individual license feeso Annual relicensingMaintaining non-profit status will also allow for receivinggrants and general support if neededDetermine the break-even point for HELIX revenueDetermine the operation cost estimates by Clearly Energyonce HELIX has been created.Explore interest in users becoming members of HELIXo If interest, could offer a free membership to utilities,states and others who choose to support theexistence of HELIXo Transition to charging for membership over timeo If no interest in becoming a member, could just offeraccess to HELIX data for free initially, but then chargefor use of the data from HELIX over time as thedatabase fills outo Offer members a discount for data accesso Track over timeLicenses provide access to the HELIX database and ability toextract datao Membership organizations (e.g., state RealtorsAssociation) could license for access for all theirmemberso Individuals (e.g., municipalities, individual businesses)could pay a reduced access feeInitial and then annual renewal to provide accessSpecifies any access limits, privacy provisions, and otherarrangementsNeed to explain how supporters benefit from financiallysupporting HELIX. What does their membership get them?Membership Classes:o HELIX Providerso HELIX Userso HELIX SupportersAnnual membership fee, varies by classPotential members:o MLS systemso Data aggregatorso Real estate professionalso Appraiserso Lenderso Municipalitieso Energy information firmso State governments10
9101112o Building DepartmentsAccess Access limitations detailed in licenses Access to just a score or the full report associated with thescore needs to be determined too.Populating the Database Responsibility transitions from ClearlyEnergy to aggregatorswith Dataworking with MLSs While the HELIX structure will be initially established andpopulated, in order to maintain the value of the HELIXDatabase, arrangements to ensure timely, clean and accurateenergy data will be paramount Data consent and privacy provisions will need to bemaintained for each state When a new score is entered into the database for anaddress that already has a score on file, the old score willneed to be archived. Users should be able to access archivedscores to see improvements made over time by address.Reporting Regular reports on data in/out/used to the HELIX Board andothersPhase 3: Undetermined Future HELIX StructureOperational DetailTBD11
AppendixSOPO SummaryThis task applies the research from Task 4 to implement an initial HELIX governance structure andoperational plan to guide HELIX development and testing. Major outcomes will include personnel andpolicy frameworks for overseeing HELIX ownership, management, development, and testing to beginwith Period Two.Objectives Addressed#2 Develop a system that enables home energy rating scores to be: (A) readily integrated into MLSlisting services, market-based home energy services, ratepayer-funded as well as state and local energyefficiency programs, financial service markets, and building energy code officials; and (B) aggregated foranalysis and public access to serve state, municipality, or utility/program administrators, and otherpublic interestsDetailsBarriers and risks: Those identified for HELIX governance roles could decline or change their positionsat some point in the course of the project.Solutions: The operational plan will include contingencies for HELIX governance succession.Subtask #6.16.2DescriptionRecommend and implement preliminaryHELIX governance and ownership structureDevelop initial operational plan12DeliverablesFramework of preliminary HELIXgovernance rules and rolesHELIX development internal guidancedocument
HELIX Governance Team's discussions and proposal to stage HELIX governance and operations through its project, subsidiary and ultimate spin-off structure phases, as discussed above. The HELIX governance structure presented below provides framework details for the "Project Phase" and "Subsidiary Phase" of HELIX.
