Assessing the Cost-Effectiveness of Energy Efficiency Portfolios

Cost-effectiveness evaluations compare energy efficiency’s benefits and costs for helping judge whether to expand, retain, revise, or eliminate efficiency programs or specific measures. Such evaluations also provide feedback on whether efficiency is an effective investment, compared with other resource options.

Nationwide, utility-customer funded efficiency measures, projects, programs and portfolios have historically been assessed through integrated resource planning processes or via standard tests defined in the California Standard Practice Manual.  In addition, a new cost-effectiveness guide, the National Standard Practice Manual (NSPM), was just published last month. The NPSM builds and expands upon the California manual and is targeted for use by regulators and all stakeholders interested in assessing efficiency. The NPSM includes a seven-step process for determining jurisdiction-appropriate test(s).

This webinar will discuss the basics of cost-effectiveness assessments for utility customer-funded efficiency portfolios as well as issues and options that should be considered when (a) assessing cost-effectiveness, (b) selecting which test(s) to use, and (c) quantifying the components of tests (e.g., non-energy impacts, measure costs). A new U.S. DOE Residential Energy Efficiency Cost-Effectiveness Tool will also be briefly discussed. As examples, representatives from Washington and Georgia state utility commissions will present on how they address efficiency cost-effectiveness.