IDER Cost-Effectiveness

Avoided Cost Calculator

The primary benefits of demand-side resources are the avoided costs related to generation and distribution of energy.  The avoided costs of electricity are modeled based on the following components: generation energy, generation capacity, ancillary services, transmission and distribution capacity, greenhouse gases, and high global warming potential gases.  The Avoided Cost Calculator is updated annually to improve the accuracy of how benefits of demand-side resources are calculated.  The most recent update was completed in 2022:

ACC Models

 

Standard Practice Manual 

The foundation of cost-effectiveness analysis for all demand-side resources is based in the Standard Practice Manual.  The Standard Practice Manual contains the Commission’s method of evaluating energy saving investments using various cost-effectiveness tests. The four tests described in the Standard Practice Manual (i.e., the Total Resource Cost (TRC), Program Administrator Cost (PAC), Ratepayer Impact Measure (RIM), and Participant Cost Test (PCT)) assess the costs and benefits of demand-side resource programs from different stakeholder perspectives, including participants and non-participants.  The specific tests and the applications of those tests varies among the resources.

Air Quality Adder Data

On March14, 2018, a ruling in the IDER proceeding (A.14-10-003) issued a Staff Proposal entitled "Distributed Energy Resource Cost-Effectiveness Evaluation: Further Recommendation on the Societal Cost Test."  The data used to the determine the Interim Air Quality Adder discussed in this Staff Proposal can be found here.

 All demand-side resources undergo a cost-effectiveness analysis:

For additional background on cost-effectiveness: