4.1.7. Section 1.G: Portfolio Analysis

In addition to providing cost-effectiveness analysis of each demand response program, Section 1.G of the protocols requires LSEs to conduct a cost-effectiveness analysis of their entire demand response portfolio. As provided in this section, the portfolio analysis will include the aggregate costs and benefits of each demand response program, as well as the costs and benefits of other demand response activities which are not program-specific, such as for general demand response marketing, education and outreach efforts and Technical Assistance activities. Most parties³¹ commenting on the proposed decision contend that it is not appropriate to include the costs of pilot programs in the portfolio analysis because only the costs, and not the benefits, of pilots can be estimated in advance. We agree, and the 2010 Protocols adopted here have been clarified to show that the costs of pilot programs, which usually are evaluated separately on an ex post basis, shall not be included in the portfolio analysis, unless it is possible to estimate the pilot program's benefits as well as its costs. The portfolio analysis should correct for any possible double-counting due to dual participation or other factors.

³¹ DRA is the only party to argue in favor of including pilot costs in the portfolio analysis. See DRA Reply Comments, November 19, 2010, at 3.