Section R14-2-2401. Definitions

In this Article, unless otherwise specified:

1.        “Adjustment mechanism” means a Commission- approved provision in an affected utility’s rate schedule allowing the affected utility to increase and decrease a certain rate or rates, in an established manner, when increases and decreases in specific costs are incurred by the affected utility.

2.        “Affected utility” means a public service corporation that provides electric service to retail customers in Arizona.

3.        “Baseline” means the level of electricity demand, elec- tricity consumption, and associated expenses estimated to occur in the absence of a specific DSM program, deter- mined as provided in R14-2-2413.

4.        “CHP” means combined heat and power, which is using a primary energy source to simultaneously produce electri- cal energy and useful process heat.

5.        “Commission” means the Arizona Corporation Commis- sion.

6.        “Cost-effective” means that total incremental benefits from a DSM measure or DSM program exceed total incremental costs over the life of the DSM measure, as determined under R14-2-2412.

7.        “Customer” means the person or entity in whose name service is rendered to a single contiguous field, location, or facility, regardless of the number of meters at the field, location, or facility.

8.        “Delivery system” means the infrastructure through which an affected utility transmits and then distributes electrical energy to its customers.

9.        “Demand savings” means the load reduction, measured in kW, occurring during a relevant peak period or periods as a direct result of energy efficiency and demand response programs.

10.     “Demand response” means modification of customers’ electricity consumption patterns, affecting the timing or quantity of customer demand and usage, achieved through intentional actions taken by an affected utility or customer because of changes in prices, market condi- tions, or threats to system reliability.

11.     “Distributed generation” means the production of elec- tricity on the customer’s side of the meter, for use by the customer, through a process such as CHP.

12.     “DSM” means demand-side management, the implemen- tation and maintenance of one or more DSM programs.

13.     “DSM measure” means any material, device, technology, educational program, pricing option, practice, or facility alteration designed to result in reduced peak demand, increased energy efficiency, or shifting of electricity con- sumption to off-peak periods and includes CHP used to displace space heating, water heating, or another load.

14.     “DSM program” means one or more DSM measures pro- vided as part of a single offering to customers.

15.     “DSM tariff” means a Commission-approved schedule of rates designed to recover an affected utility’s reasonable and prudent costs of complying with this Article.

16.     “Electric utility” means a public service corporation pro- viding electric service to the public.

17.     “Energy efficiency” means the production or delivery of an equivalent level and quality of end-use electric service using less energy, or the conservation of energy by end- use customers.

18.     “Energy efficiency standard” means the reduction in retail energy sales, in percentage of kWh, required to be

Corporation Commission – Fixed Utilities

achieved through an affected utility’s approved DSM pro- grams as prescribed in R14-2-2404.

19.     “Energy savings” means the reduction in a customer’s energy consumption directly resulting from a DSM pro- gram, expressed in kWh.

20.     “Energy service company” means a company that pro- vides a broad range of services related to energy effi- ciency, including energy audits, the design and implementation of energy efficiency projects, and the installation and maintenance of energy efficiency mea- sures.

21.     “Environmental benefits” means avoidance of costs for compliance, or reduction in environmental impacts, for things such as, but not limited to:

a.         Water use and water contamination,

b.        Monitoring storage and disposal of solid waste such as coal ash (bottom and fly),

c.         Health effects from burning fossil fuels, and

d.        Emissions  from  transportation   and  production   of fuels and electricity.

22.     “Fuel-neutral” means without promoting or otherwise expressing bias regarding a customer’s choice of one fuel over another.

23.     “Incremental benefits” means amounts saved through avoiding costs for fuel, purchased power, new capacity, transmission, distribution, and other cost items necessary to provide electric utility service, along with other improvements in societal welfare, such as through avoided environmental impacts, including, but not lim- ited to, water consumption savings, air emission reduc- tion, reduction in coal ash, and reduction of nuclear waste.

24.     “Incremental costs” means the additional expenses of DSM measures, relative to baseline.

25.     “Independent program administrator” means an impartial third party employed to provide objective oversight of energy efficiency programs.

26.     “kW” means kilowatt.

27.     “kWh” means kilowatt-hour.

28.     “Leveraging” means combining resources to more effec- tively achieve an energy efficiency goal, or to achieve greater energy efficiency savings, than would be achieved without combining resources.

29.     “Load management” means actions taken or sponsored by an affected utility to reduce peak demands or improve system operating efficiency, such as direct control of cus- tomer demands through affected-utility-initiated interrup- tion or cycling, thermal storage, or educational campaigns to encourage customers to shift loads.

30.     “Low-income customer” means a customer with a below average level of household income, as defined in an affected utility’s Commission-approved DSM program description.

31.     “Market transformation” means strategic efforts to induce lasting structural or behavioral changes in the market that result in increased energy efficiency.

32.     “Net benefits” means the incremental benefits resulting from DSM minus the incremental costs of DSM.

33.     “Non-market benefits” means improvements in societal welfare that are not bought or sold.

34.     “Program costs” means the expenses incurred by an affected utility as a result of developing, marketing, implementing, administering, and evaluating Commis- sion-approved DSM programs.

35.     “Self-direction” means an option made available to quali- fying customers of sufficient size, in which the amount of

money paid by each qualifying customer toward DSM costs is tracked for the customer and made available for use by the customer for approved DSM investments upon application by the customer.

36.     “Societal Test” means a cost-effectiveness test of the net benefits of DSM programs that starts with the Total Resource Cost Test, but includes non-market benefits and costs to society.

37.     “Staff” means individuals working for the Commission’s Utilities Division, whether as employees or through con- tract.

38.     “Thermal envelope” means the collection of building sur- faces, such as walls, windows, doors, floors, ceilings, and roofs, that separate interior conditioned (heated or cooled) spaces from the exterior environment.

39.     “Total Resource Cost Test” means a cost-effectiveness test that measures the net benefits of a DSM program as a resource option, including incremental measure costs, incremental affected utility costs, and carrying costs as a component of avoided capacity cost, but excluding incen- tives paid by affected utilities and non-market benefits to society.

Historical Note

New Section made by final rulemaking at 16 A.A.R.

2254, effective January 1, 2011 (Supp. 10-4).