Where Did the Money Go? The Cost and Performance of the Largest Commercial Sector DSM Programs

We calculate the total resource cost (TRC) of energy savings for 40 of the largest 1992 commercial sector DSM programs. The calculation includes the participating customer's cost contribution to energy saving measures and all utility costs, including incentives received by customers, program administrative and overhead costs, measurement and evaluation costs and shareholder incentives paid to the utility. All savings are based on post-program savings evaluations. We find that, on a savings-weighted basis, the programs have saved energy at a cost of 3.2 ¢/kWh. Taken as a whole, the programs have been highly cost effective when compared to the avoided costs faced by the utilities when the programs were developed. We investigate reasons for differences in program costs and examine uncertainties in current utility practices for reporting costs and evaluating savings.