Section R14-2-2412. Cost-effectiveness

A.      An affected utility shall ensure that the incremental benefits to society of the affected utility’s overall DSM portfolio exceed the incremental costs to society of the DSM portfolio.

Corporation Commission – Fixed Utilities

B.       The Societal Test shall be used to determine cost-effective- ness.

C.      The analysis of a DSM program’s or DSM measure’s cost- effectiveness may include:

1.        Costs and benefits associated with reliability, improved system operations, environmental impacts, and customer service;

2.        Savings of both natural gas and electricity; and

3.        Any uncertainty about future streams of costs or benefits.

D.      An affected utility shall make a good faith effort to quantify water consumption savings and air emission reductions, while other environmental costs or the value of environmental improvements shall be estimated in physical terms when prac- tical but may be expressed qualitatively. An affected utility, Staff, or any party may propose monetized benefits and costs if supported by appropriate documentation or analyses.

E.       Market transformation programs shall be analyzed for cost- effectiveness by measuring market effects compared to pro- gram costs.

F.       Educational programs shall be analyzed for cost-effectiveness based on estimated energy and peak demand savings resulting from increased awareness about energy use and opportunities for saving energy.

G.      Research and development and pilot programs are not required to demonstrate cost-effectiveness.

H.      An affected utility’s low-income customer program portfolio shall be cost-effective, but costs attributable to necessary health and safety measures shall not be used in the calculation.

Historical Note

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

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