Energy Efficiency Cost-Effectiveness Screening
Energy efficiency is widely recognized as a low-cost, readily available resource that offers a variety of benefits to utility customers and to society as a whole. There is a great amount of variation across the states in the ways that energy efficiency programs are screened for cost-effectiveness. Many states apply methodologies and assumptions that do not capture the full value of efficiency resources, leading to under-investment in this low-cost resource, and thus higher costs to utility customers and society. This report addresses the major differences between tests, and is designed to help regulators recognize the important features of these broad cost-benefit tests that are frequently overlooked as the tests are applied. The authors address two elements of energy efficiency program screening that are frequently treated improperly or entirely overlooked – “other program impacts” (OPIs) and the costs of complying with environmental regulations.