4.1.6. Section 1.F: Types of Analyses Expected

Many of the costs and benefits of demand response (and other) programs are based on uncertain inputs or are subject to considerable variation, making them difficult or prohibitively expensive to quantify. In order to begin the process of defining and narrowing these uncertainties and variations, Section 1.F of the protocols requires qualitative analysis of hard-to-quantify costs and benefits. These qualitative analyses are intended to assist in comparing demand response programs by providing information (even if qualitative) on these hard-to-quantify costs and benefits. LSEs may estimate these costs and benefits, but if they cannot they are required to describe any relevant information about costs and benefits of any demand response program, which will be considered as part of the cost-effectiveness analysis of that program. This applies particularly to environmental, market and reliability, and non-energy/non-monetary benefits. Other parties are also invited to provide evidence of the extent to which these hard-to-quantify benefits apply to individual demand response programs.

Some costs and benefits used in the analysis under these protocols are presented as precise quantities, but are actually estimates because they are dependent on uncertain assumptions and estimated inputs. For this reason, the protocols require sensitivity analysis of certain key variables such as participant costs, avoided generation capacity and T&D costs, and load impacts.