4.1. Section 1: General Guidance

In prior reporting cycles, each utility used its own inputs and models for calculating demand response cost-effectiveness. The use of separate models and data, some of which are proprietary, produced results that varied significantly. Some variation would be expected due to the different characteristics of each utility system. However, given the proprietary nature of some of the models and input data, and the complexity of some of the models, it is extremely difficult to determine to what degree the variations reflect actual differences in the utility service territories or are due to different underlying assumptions, input data, modeling approaches or other factors.

For this reason, we require the utilities use the same public and transparent cost-effectiveness model provided by the Commission. This approach is consistent with that used for reporting energy efficiency and distributed generation cost-effectiveness. As in those proceedings, two models will be used, one to calculate avoided costs and one to report program results. Section 1 of the 2010 Protocols describes this consistent framework and provides guidance to ensure it meets the goals of consistency, transparency, and accuracy.