Energy Efficiency Cost-Effectiveness Screening
Synapse prepared a study of how to account for “other program impacts” (i.e., non-energy benefits and the other fuel savings) and the cost of compliance with environmental regulations when screening energy efficiency programs for cost-effectiveness. While “other program impacts” clearly should be accounted for in the Total Resource Cost test, and most states use this test, in practice they are grossly understated or not accounted for at all. This leads to a significant undervaluation of energy efficiency resources, leading to higher costs to consumers. Similarly, many states do not properly account for the extent to which energy efficiency can reduce the costs of complying with current and future anticipated environmental regulations. This can also lead to a significant undervaluation of energy efficiency resources and higher costs. The report offers many recommendations to address these two issues.