Page 217 - Sustainable Cities and Communities Design Handbook

Life Cycle Analysis Chapter j 10 191

I I
X X
UIC t ¼ ðDEN it MC: E it ðK it 1ÞÞ þ ðDDN it MC: D it ðK it 1ÞÞ
i¼1 i¼1
where:
(only terms not previously defined are included here.)
DEN it ¼ Reduction in net energy use in costing period i in year t
DDN it ¼ Reduction in net demand in costing period i in year t
MC:E it ¼ Marginal cost of energy in costing period i in year t
MC:D it ¼ Marginal cost of demand in costing period i in year t

The revenue impact terms (RG t ,RL t , and RL at ) are parallel to the bill
impact terms in the Participant Test. The terms are calculated in exactly the
same way with the exception that the net impacts are used rather than gross
impacts. If a net-to-gross ratio is used to differentiate gross savings from net
savings, the revenue terms and the participant’s bill terms will be related as
follows:

RG t ¼ BI t ðnet-to-gross ratioÞ
RL t ¼ BR t ðnet-to-gross ratioÞ

RL at ¼ AB at ðnet-to-gross ratioÞ

TOTAL RESOURCE COST TEST (REFER TO POINT 6 OF
NOTES)
Definition

The TRC Test measures the net costs of a DSM program as a resource option
based on the total costs of the program, including both the participants’ and the
utility’s costs.
The test is applicable to conservation, load management, and fuel substi-
tution programs. For fuel substitution programs, the test measures the net
effect of the impacts from the fuel not chosen versus the impacts from the fuel
that is chosen as a result of the program. TRC Test results for fuel substitution
programs should be viewed as a measure of the economic efficiency impli-
cations of the total energy supply system (gas and electric).
A variant of the TRC Test is the Societal Test. The Societal Test differs
from the TRC Test in that it includes the effects of externalities (e.g., envi-
ronmental, national security), excludes tax credit benefits, and uses a different
(societal) discount rate.
Benefits and costs: this test represents the combination of the effects of a
program on both the customers participating and those not participating in a
program. In a sense, it is the summation of the benefit and cost terms in the