In the 36 years since the California Standard Practice Manual (CaSPM) was first released, cost-effectiveness testing has spread across the country following the growth of utility customer-funded energy efficiency. The California tests have been adopted by utilities, consultants, regulatory commissions and legislators to determine whether an energy efficiency measure or program is worth pursuing and whether a completed program performed as expected. Fundamentally, a cost-effectiveness test measures the total benefits divided by the total costs, and passes if the ratio is greater than or equal to 1.0.
E4TheFuture interviewed various regional energy efficiency organizations (REEOs) about their reflections on the National Standard Practice Manual (NSPM). MEEA's Greg Ehrendreich spoke with E4TheFuture about the NSPM's uptake in the Midwest, and their conversation is excerpted below. To see responses from the other REEOs, read their full blog.
Cost-effectiveness testing is an important part of energy efficiency planning, reporting and evaluation. Utilities use cost-effectiveness tests to demonstrate that their investments in energy efficiency are in the best interests of the utility, their customers and society in general. The traditional tests come from a California Public Utility Commission manual that was developed in the early 1980s and last updated in 2001.
"Using energy efficiency as an energy resource" similar to supply-side resources is a phrase often repeated by those working in the efficiency industry. That sounds good, but how exactly do we capture the value of energy efficiency? And what policy and regulatory practices are used to do this? Three regulatory constructs are at the forefront of the answer to these questions: cost-effectiveness tests, integrated resource planning (IRP) and technical reference manuals (TRMs). As with many great meetings of the minds, MEEA members congregated in Rosemont, Illinois on June 15 to explore these questions and topics in a workshop titled “Valuing Energy Efficiency.”
Over the last year, MEEA launched an initiative aimed at helping members better understand the intelligent efficiency revolution now upon us. This effort, which began as a simple collaborative for meeting and sharing knowledge, revealed that many stakeholders have both a strong interest in learning more about the application of intelligent efficiency concepts and technology, but also reluctance about technical details, new products and vendors, EM&V and other challenges.