Page 202 - Sustainable Cities and Communities Design Handbook

176 Sustainable Cities and Communities Design Handbook

Benefits and Costs 203 Derivation of RIM Lifecycle
Glossary of Symbols 204 Revenue Impact Formula 206
Appendix C 206 Rate Impact Measure 206
Reference 207

THE BASIC METHODOLOGY

Efficiency, conservation, and load management (C&LM) programs have been
promoted since the 1970s by the California Public Utilities Commission
(CPUC) and the California Energy Commission (CEC) as alternatives to
-power plant construction and gas supply options. C&LM programs have been
implemented in California by the major utilities through the use of ratepayer
money and by the CEC pursuant to the CEC legislative mandate to establish
energy efficiency standards for new buildings and appliances. The result is that
California has been ranked consistently as one of the most energy-efficient
states.
While cost effectiveness procedures for the CEC standards are outlined in
the Public Resources Code, there was no such official guideline for utility-
sponsored programs. With the publication of the Standard Practice for Cost-
Benefit Analysis of Conservation and Load Management Programs in Feb.
1983, this void was substantially filled. With the informal “adoption” 1 year
later of an appendix that identified cost-effectiveness procedures for an “All
Ratepayers” Test, C&LM program cost-effectiveness consisted of the appli-
cation of a series of tests representing a variety of perspectivesdparticipants,
nonparticipants, all ratepayers, society, and the utility. The Standard Practice
Manual (SPM) was revised again in 1987e88. The primary changes (relative
to the 1983 version) were:

1. renaming the “Non-Participant Test” to the “Ratepayer Impact Test”;
2. renaming the “All-Ratepayer Test” to the “Total Resource Cost (TRC)
Test”;
3. treating the “Societal Test” as a variant of the “TRC Test”;
4. expanding the explanation of “demand-side” activities that should be
subjected to standard procedures of benefitecost analysis.
Further changes to the manual captured in the 2002 (Clark et al., 2002)
version were prompted by the cumulative effects of changes in the electric and
natural gas industries, and a variety of changes in California statute related to
these changes. As part of the major electrical industry restructuring legislation
of 1996 (AB1890), for example, a public goods charge was established that
ensured minimum funding levels for “cost-effective conservation and energy
efficiency” for the 1998e2002 period, and then (in 2000) this was extended
until the year 2011. Additional legislation in 2000 (AB1002) established a
natural gas surcharge for similar purposes. Later in that year, the Energy