Page 213 - Sustainable Cities and Communities Design Handbook

Life Cycle Analysis Chapter j 10 187

costs. Conversely, rates or bills will go up if revenues collected after program
implementation are less than the total costs incurred by the utility in imple-
menting the program. This test indicates the direction and magnitude of the
expected change in customer bills or rate levels.

Benefits and Costs
The benefits calculated in the RIM Test are the savings from avoided supply
costs. These avoided costs include the reduction in transmission, distribution,
generation, and capacity costs for periods when load has been reduced and the
increase in revenues for any periods in which load has been increased. The
avoided supply costs are a reduction in total costs or revenue requirements and
are included for both fuels for a fuel substitution program. The increase in
revenues are also included for both fuels for fuel substitution programs. Both
the reductions in supply costs and the revenue increases should be calculated
using net energy savings.
The costs for this test are the program costs incurred by the utility, and/or
other entities incurring costs and creating or administering the program, the
incentives paid to the participant, decreased revenues for any period in which
load has been decreased, and increased supply costs for any period when load
has been increased. The utility program costs include initial and annual costs,
such as the cost of equipment, operation and maintenance, installation, pro-
gram administration, and customer dropout and removal of equipment (less
salvage value). The decreases in revenues and the increases in the supply costs
should be calculated for both fuels for fuel substitution programs using net
savings.

How the Results Can Be Expressed

The results of this test can be presented in several forms: the lifecycle revenue
impact (cents or dollars) per kWh, kW, therm, or customer; annual or first-year
revenue impacts (cents or dollars per kWh, kW, therms, or customer); BCR;
and NPV. The primary units of measurement are the lifecycle revenue impact,
expressed as the change in rates (cents per kWh for electric energy, dollars per
kW for electric capacity, cents per therm for natural gas), and the NPV.
Secondary test results are the lifecycle revenue impact per customer, first-year
and annual revenue impacts, and the BCR. The lifecycle revenue impact
(LRI RIM ) values for programs affecting electricity and gas should be calcu-
lated for each fuel individually (cents per kWh or dollars per kW and cents per
therm) and on a combined gas and electric basis (cents per customer).
The LRI is the one-time change in rates or the bill change over the life of
the program needed to bring total revenues in line with revenue requirements
over the life of the program. The rate increase or decrease is expected to be put
into effect in the first year of the program. Any successive rate changes such as