Energy Efficiency Cost-Effectiveness Tests: Lessons for Michigan from Eight States

Synapse recently assisted Michigan’s Public Service Commission and State Energy Office in evaluating the economics of the state’s energy efficiency programs by surveying cost-effectiveness screening practices in Michigan and in eight other states: Connecticut, Illinois, Massachusetts, Minnesota, New York, Oregon, Vermont, and Wisconsin. For each state, Synapse researched which cost-effectiveness tests (the Societal Cost test, the Total Resource Cost test, and/or the Program Administrator Cost test) the states use and how the tests are applied; the avoided costs included in the primary test; and the other program impacts included in the primary test. Our findings are included as Appendix D of a draft energy efficiency report for Michigan: Readying Michigan to Make Good Energy Decisions: Energy Efficiency. The State is soliciting public comments on the draft report until November 6, 2103, and will consider these comments during preparation of the final report, which is scheduled for release on November 26.