Page 208 - Sustainable Cities and Communities Design Handbook

182 Sustainable Cities and Communities Design Handbook

Balancing the Tests
The tests set forth in the manual are not intended to be used individually or in
isolation. The results of tests that measure efficiency, such as the TRC Test, the
Societal Test, and the PAC Test, must be compared not only with each other
but also with the RIM Test. This multiperspective approach will require
program administrators and state agencies to consider trade-offs between the
various tests. Issues related to the precise weighting of each test relative to
other tests and to developing formulas for the definitive balancing of
perspectives are outside the scope of the manual. The manual, however, does
provide a brief description of the strengths and weaknesses of each test
(Sections Participant Test, The Ratepayer Impact Measure Test, Total
Resource Cost Test, and Program Administrator Cost Test) to assist users in
qualitatively weighing test results.

Limitations: Externality Values and Policy Rules

The list of externalities identified in section Total Resource Cost Test, in the
discussion on the Societal version of the TRC Test is broad, illustrative and by
no means exhaustive. Traditionally, implementing agencies have indepen-
dently determined the details such as the components of the externalities, the
externality values, and the policy rules that specify the contexts in which the
externalities and the tests are used.

Externality Values

The values for the externalities have not been provided in the manual. There
are separate studies and methodologies to arrive at these values. There are also
separate processes instituted by implementing agencies before such values can
be adopted formally.

Policy Rules

The appropriate choice of inputs and input components vary by program area
and project. For instance, low-income programs are evaluated using a broader
set of nonenergy benefits, which have not been provided in detail in the
manual. Implementing agencies traditionally have had the discretion to use or
not use these inputs and/or benefits on a project- or program-specific basis.
The policy rules that specify the contexts in which it is appropriate to use the
externalities, their components, and tests mentioned in the manual are an
integral part of any cost-effectiveness evaluation. These policy rules are not a
part of the manual.
To summarize, the manual provides the methodology and the costebenefit
calculations only. The implementing agencies (such as the CPUC and the
CEC) have traditionally utilized open public processes to incorporate the