Library: UCT

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Whose Perspective? The Impact of the Utility Cost Test

Date Published: December 12, 2011     Document Type: Report

As more states have adopted portfolio standards for energy efficiency, a majority have selected the Total Resource Cost Test (TRC) as the cost-effectiveness threshold utilities must meet. This trend, however, may be changing. In 2009, Utah altered course, and required all programs pass the Utility Cost Test (UCT), rather than the TRC. Similarly, in 2008 Michigan passed Public Act 295, adopting the UCT as the cost-effectiveness screening test. Each test reflects a different perspective, and, depending on that perspective, desired outcomes can differ dramatically. This study examines: the theory behind each test perspective; the rationale for adopting each test; and key outcomes, including achieved savings, overall cost-effectiveness, cost-per-kWh, and the diversity of program offerings. The paper also examines advantages lost when only one test is used in evaluating a program’s worthiness, and a glimpse of energy-efficiency’s future if more jurisdictions adopt the UCT over the TRC.

Addressing Non-Energy Benefits in the Cost-Effectiveness Framework

Date Published: January 1, 2011     Document Type: Report
Sectors: Research, Evaluation, & Behavior

It is widely argued that there are benefits associated with and attributable to utility demand-side programs beyond direct energy savings.  There are three classes of these non-energy benefits (NEBs) based on “beneficiary” or “perspective” (Skumatz et al. 2009). Participant NEBs accrue to the program participants (such as reduced building operating costs, increased value, comfort, health, and safety). Utility NEBs are realized as indirect costs or savings to the utility (such as bill payment improvements, infrastructure savings, etc.). Societal NEBs represent indirect program effects beyond those realized by ratepayers/utility or participants, and they accrue to society at large (such as job creation, tax receipts growth, labor productivity, housing value, neighborhood stability, and reduced emissions and other environmental benefits).  This paper considers various methods for addressing NEBs in the CPUC’s cost-effectiveness tests for demand-side resources.