3.5. Requirements for Sensitivity Analyses and Qualitative Analyses
The 2008 Staff Proposal contained a requirement that the utilities provide a broad array of sensitivity analyses on many of the costs and benefits that may affect the calculated SPM results, and qualitative analysis of factors that may be difficult to quantify at this time. Several parties, including the aggregators, supported the sensitivity analysis requirements included in the 2008 Staff Proposal,21 but other parties, notably the three utilities, argued that the sensitivity requirements would be overly burdensome, and the requirements for qualitative analyses are inappropriate.22
The 2010 Protocols include requirements for a reduced set of sensitivity analyses that focus on the variables expected to be the key drivers of each program's cost-effectiveness. The sensitivity analysis will be performed within the Demand Response Reporting Template, and therefore will not be burdensome to the utilities. The sensitivity analysis will provide a sense of the impact of any error in the calculation of the major inputs driving the final results. Given the uncertainties inherent in many of the estimated values included in any cost-effectiveness analyses of demand response programs, we hope that the required sensitivity analyses will provide us with a picture of the range of circumstances under which the various programs would be cost effective. This should provide a more robust analysis without being overly burdensome.
We still require qualitative analysis of a few factors that are difficult to quantify, despite the concerns that these analyses may not provide useful information or may inappropriately include value for these factors in the analysis. We believe that the qualitative analyses of these factors will assist us in determining if actual quantitative values for these factors can or should be included in potential future updates of the cost-effectiveness protocols. The protocols specifically invite parties other than the utilities to provide their own qualitative analyses of these hard-to-quantify factors, and encourage them to provide evidence of the value, if any, of these factors for specific demand response programs.
21 Comments of EnerNoc, Inc., EnergyConnect, Inc., and ComVerge, Inc., on the Staff Draft Demand Response Cost Effectiveness Protocols, filed in R.07-01-041 on April 25, 2008, at 2.
22 See, for example, PG&E Comments filed April 25, 2010, at 2-3.
