Standard Practice Manual
The Standard Practice Manual contains the Commission’s method of evaluating energy efficiency investments using various tests of cost-effectiveness. The policy rules require that the energy efficiency portfolio as a whole has more benefits than costs, based on both the Total Resource Cost (TRC) and e Program Administrator Cost (PAC) tests.
The Standard Practice Manual defines the TRC test as the measurement of the net benefit that accrues to society as a whole. It compares the benefits, which are the avoided cost of generating electricity and supplying natural gas, with the total costs, which include administrative costs and the entire cost to the utilities and participating customers of any equipment installed. The PAC test does not include the costs incurred by participating customers but does include incentives paid to participating customers.
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Avoided Cost Update
The primary benefits of energy efficiency are the avoided costs of building and operating power plants, transmission and distribution lines, and other facilities related to the provision of electric and gas services. Avoided costs are under review in R.09-11-014. (See Energy Efficiency Avoided Cost Scenario Comparison)
The avoided costs calculator can be downloaded here.
Avoided costs, and the other costs and benefits of energy efficiency, are input in to the “E3 Calculator” which is used by all California investor-owned utilities to compute the cost-effectiveness of energy efficiency programs.
The utilities cost-effectiveness calculators can be downloaded here.